Small Increase in Mortgage Refinance


The share of refinanced mortgages marked a slight increase during the week ending April 11th. This is certainly an improvement from the previous weeks, but could it be a sign that the market for these home loans is reviving? Lenders have been struggling to attract consumers since the beginning of 2014 and now the falling interest rates are in their favor.

In the week ending April 11th, the share of refinance activity among all mortgage activity was 52%. This marked a 1% increase from the previous week ending April 4th. The increase is quite small, but before it the share of refinance activity had been falling for 9 weeks in a row. The big question is whether this improvement is temporary and whether we will see more activity in this home loan field in the coming months.

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Currently, the share of refinance is at its lowest point since May 2009. It hit its highest point near the end of 2012 when the mortgage refinance deals accounted for 84% of all deals concluded in the market. Back then the average home loan rate was 3.5%. At present, the average interest rate is 4.375%. It is still extremely low and way below the predicted 5%.

The annual increase of the mortgage rate is 1% while the decrease in refinance activity is approximately 30%. This clearly illustrates that the rate of refinance is extremely sensitive to the fluctuations of the home loan rate. During the week ending April 11th, the mortgage rate fell from 4.5% to 4.375%. This very small decrease resulted in a 1% increase in the refinance activity.

Whether the mortgage refinance activity will increase or decrease in the coming months depends primarily on the movement of the mortgage rate. Despite the predicted increase for 2014, the home loan rate will most likely remain low at least in the coming months. This will have a positive impact on refinance.



Christian Calvin mortgage Christian is a contributing writer for He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.


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