Homeowners Avoid Refinancing on Hike in Mortgages

These operations have become the smallest part of the US credit business.

Refinancing has become the smallest part of the mortgage business than at any other time in the past 2 decades, posing a challenge for lenders, who already fear that higher interest rates and ever-higher home prices of houses could eventually depress purchasing activity.

Last year, 37% of mortgage loan volume was due to refinancing, according to industry research group Inside Mortgage Finance. That’s the smallest proportion since 1995, and the amount of refinancing is widely expected to drop again this year. In 2012, refinancing was 72% of orifications.

While buying activity has risen steadily after being at its lowest post-financial crisis point in 2011, growth in 2017 was not enough to offset a $ 366 billion drop in refinancing activity. The result: The overall mortgage market fell nearly 12% to $ 1.8 trillion, according to Inside Mortgage Finance.

Source ( El Mercurio )

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