Refi-application growth triples nationwide

by Candyd Mendoza26 Mar 2020

The share of Americans who applied for a refinance has spiked from a year ago, largely driven by the volatility in mortgage rates caused by the coronavirus pandemic.

Year over year, refinance applications through LendingTree's platform tripled in each of the 50 largest metros and in all but five states.

"A mortgage refinance, particularly at these historically low rates, presents an attractive opportunity for homeowners amid economic uncertainty," said LendingTree Chief Economist Tendayi Kapfidze.

The city that experienced the most annual growth in refinance loan requests was San Francisco at 417%. Raleigh, N.C. (406%), San Jose (394%), Austin, Texas (386%), and Seattle (371%) rounded out the top five.

Despite growth rates above 200%, Buffalo, N.Y., Louisville, Ky., and Memphis, Tenn., lagged in refinance applications.

Nebraska led the states with growth rates above 300%, with applications up 338%. Meanwhile, five underperforming states reported rates below 200%, including West Virginia, Mississippi, Kentucky, Arkansas, and Alabama.

States and cities with higher average credit scores and greater home-price appreciation are better positioned to refinance, according to LendingTree. The report found correlations to refi-application growth of 0.37  for home-value appreciation growth over five years, and 0.57 for average homeowner credit scores.

"Compared to a year ago when rates were one percentage point higher, consumers save nearly $60 per month — or $700 per year in payments — for every $100,000 borrowed. Interest savings add up to about $20,000 over the 30-year term of a typical mortgage," Kapfidze said.