Home refinances may hit a seven-year high this quarter as Americans chase the lowest home-loan rates ever recorded. Refi volume probably will total $429 billion, more than double the $180 billion of the year-ago quarter, according to a Fannie Mae forecast. Homeowners who aren’t among the more than 30 million people who have lost jobs during the pandemic will be eager to lock rates that are the lowest ever recorded, said Keith Gumbinger, a vice president at HSH Associates, a mortgage research firm. While rates have bumped around in recent days, they’re still near the all-time low set late in April that broke the old record set in early March, Gumbinger said. Many homeowners are sitting on an equity cushion after several years of hefty home-price gains that will help them meet stricter standards being imposed by lenders, he said.
The median price of an existing home rose 8% year-over-year to $280,600 in March, the National Association of Realtors said. “We keep touching these record lows, and for folks who are reasonably well aligned with changing underwriting standards, there’s a good opportunity here to free up some cash,” Gumbinger said. “If someone saves a few hundred dollars a month by locking in at a lower rate, that’s money that’s typically spent into the economy, supporting economic growth,” Gumbinger added. For the year, refinancing volume probably will total $1.4 trillion, the highest since 2012, according to Fannie Mae. Origination volume for purchase loans likely will total $1.1 trillion, the lowest since 2016, the forecast said.