Big Drop in Refis Leads to Fewer Originations

Blomquist: “Many homeowners who would refi have already done so in the last few years at a low interest rate that is not far above the current rate, and so there is little incentive for them to refi again.”

IRVINE, CA—After a surprisingly strong 2015, the mortgage refi market started running out of steam in the first quarter of 2016 despite lower mortgage interest rates, says RealtyTrac’s VP Daren Blomquist. According to a report from the firm, 1.4 million loans were originated on US residential properties in the first quarter, down 12% from the previous quarter and down 8% from a year ago to the lowest level since the first quarter of 2014.

The year-over-year decrease in total originations was driven by a 20% year-over-year decrease in refinance originations, even while purchase originations increased 3% from a year ago and HELOC originations increased 10% from a year ago. The loan-origination report is derived from publicly recorded mortgages and deeds of trust collected by RealtyTrac in more than 950 counties accounting for more than 80% of the US population.