#Refinance February 15

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For February 2024 several of us will be participating in the “30-Day RE Coach4aday Challenge”. The challenge involves utilizing a word that includes the prefix Re. Today my word is REFINANCE.

Covid caused Americans to engage in a number of behaviors at record levels. One of those was choosing to REFINANCE their home mortgage. Approximately one-third of outstanding mortgage balances was refinanced during the seven quarters of the refi boom (This was from the second quarter of 2020 to the end of 2021).

Rules of the Challenge

Organizing the 30-Day RE Coach4aday Challenge involves performing, writing, or sharing about an event that captures the essence of the prefix. connections.

Here is how to participate.

1. Identify what word that uses the prefix RE you choosing for the day. It is okay to repeat words.
2. Describe or share how you accomplished utilizing that word.
3. Do this daily for 30 Days posting on social media with the hashtag #Coach4adayChallenge

February 15-Who Refinanced During the Pandemic

The pandemic in the world of mortgages is often called the Pandemic Refi Boom.

Mortgages from older vintage—those originating prior to 2010—demonstrated the lowest tendency for refinancing. Specifically, less than 9 percent of mortgages originating before 2010 and still in repayment by 2020 underwent refinancing. Comparatively, approximately 17 percent of mortgages from the 2010 to 2014 period were refinanced. Conversely, almost a third of mortgages from 2015 and beyond were refinanced during the relevant quarters.

Less than 10 percent of the mortgages with balances below $100,000 outstanding as of the first quarter of 2020 were subsequently refinanced, compared to nearly half of mortgages with balances between $400,000 and $500,000. Interestingly the propensity starts to decline after $500,000.

For those who entered the market before the close of 2020, it proved to be a wise decision. Interest rates climbed by 400 basis points, from a historically low 2.68 percent contract rate on 30-year mortgages in December 2020 to 6.90 percent by October 2022. This swing marked an amplitude not witnessed since the early 1980s.