According to Black Knight’s Mortgage Monitor Report, roughly 2.8 million homeowners refinanced their mortgage in the last quarter of 2020. That represented a record breaking $869 billion in refinance lending. As we approach the end of the first quarter of 2021, refinance transactions are still in line with the record numbers from the previous quarter, but due to the recent rise in interest rates, the window for refinancing may be beginning to close slightly. Black Knight reported that as of February 11th, there were still 18.1 million high quality mortgage refinance candidates remaining. However, as of the recent surge in interest rates in early March, that number has dropped to 12.9 million, representing the lowest volume since May of 2020 and down 30% in just a few weeks.
On the contrary to refinances, the Mortgage Bankers Association (MBA) is expecting the purchase market to increase despite the rise in rates. Their data suggests that as the refinance market begins to pull back, the purchase market will increase, due to economic resilience and vaccine distribution. With an already high demand for housing, analysts expect an even bigger influx of home buyers looking to enter the market. Overall, the MBA expects the mortgage industry to originate a staggering $3 trillion in total volume in 2021, with a $1.57 trillion majority coming from purchases.
Source: http://bit.ly/3vkx0qr
By: Jon Iacono