When it comes to the growing share of refinances across the nation, San Francisco and Raleigh, North Carolina, are heads and shoulders above the rest, according to a study by LendingTree. [1]
The study found refinances in the Bay Area have grown by 417% over the last year and was followed by the 406% growth in Raleigh.
California is home to four of the top-10 cities that report a growing refinancing market: San Jose (394%); San Diego (360%), and Los Angeles (345%).
Nebraska was found to have the fastest growth of all states, with applications rising 338%—leading nine states with growth rates above 300%.
Despite reporting growth of 205% over the past year, Buffalo, New York, had the smallest annual growth in the refinance market. Both Memphis, Tennessee, and Louisville, Kentucky, recorded growth of 206%.
West Virginia was the state with the lowest growth, coming in at 164%.
“A mortgage refinance, particularly at these historically low rates, presents an attractive opportunity for homeowners,” said Tendayi Kapfidze, LendingTree’s Chief Economist. “Compared to a year ago when rates were 1 percentage point higher, consumers save nearly $60 per month—or $700 per year in payments—for every $100,000 borrowed. Interest savings add up to about $20,000 over the 30-year term of a typical mortgage.”
ATTOM Data Solutions [2]previously reported that 1.27 million refinances were secured during Q4 2019, which is a 20% increase from the prior quarter.
The number of refinances secured during Q4 2019 is at its highest point since Q3 2013.
ATTOM states refinance secured during Q4 2019 represented an estimated $391.3 billion in total dollar volume, which is up 19% from the prior quarter and 138% from Q4 2018.
The total number of loan originations rose 40% annually during Q4 2019 to 2.27 million, which is the highest point since Q3 2016.
The fourth quarter was a banner period for residential mortgages across the United States, as declining interest rates and a strong economy helped spur more than 2 million borrowers to sign on for new or refinanced loans,” said Todd Teta, Chief Product Officer at ATTOM Data Solutions. “Refinancing largely drove the trend, with more than twice as many homeowners trading in higher-interest mortgages for cheaper ones than in the same period of 2018.