In January 2023, refinance lock volume increased as 30-year mortgage rates rose above 7% for the first time since May 2023. Growth in refinance volume illustrates that homeowners, notably those who bought homes in late 2023, are capitalizing on refinancing opportunities. However, purchase lock counts saw the lowest figures since tracking began in 2019 due to high home prices. While total rate lock volume rose nearly 11% driven by increased purchase and cash-out refinancing, rate-and-term refis actually decreased, reflecting the dual impact of affordability challenges in the housing market.
On one hand, refinance activity saw impressive YoY growth despite elevated rates, signaling a growing pool of homeowners with mortgage rates high enough to justify a refinance.
A combination of high home prices and rates are curbing purchase activity, while at the same time fueling refinance demand among homeowners who purchased when rates were even higher.
The average loan amount in New York City was $576,385, indicating significant refinance activity in high-value metro areas.
January lock data shows two important ways constrained affordability is impacting the housing finance market.
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