Hottest housing markets ripe for refinances

by Kimberly Greene08 May 2019

This time last year, refis were trending down, and originators who hadn’t already shifted to purchase business were scrambling to catch up. Now, however, the persistence of low interest rates have gotten rid of many fears that refis have disappeared, and in fact, home equity continues on an upward trajectory.

Earlier this year, Clever Real Estate looked at the fastest-growing housing markets and the predictions of what this year will bring. While the truth of those predictions won’t be revealed for quite some time, originators can look at these cities in particular to see where there’s heightened potential for more refi business.

  1. Las Vegas, NV
    Average home value: $227,300; YoY increase: 13.9%; Zillow 2019 YoY forecast: 7.1%

In Las Vegas, supply doesn’t seem to be an issue, although demand isn’t as high as it is in other regions. As it will be tricky for sellers to navigate this space, many homeowners may choose to stay put and benefit from the increased home prices with a cash-out refi—before buyers catch on.

  1. Atlanta, GA
    Average home value: $215,000; YoY increase: 13.3%; Zillow 2019 YoY forecast: 7.6%

Atlanta doesn’t have the problems of Las Vegas; housing inventory is down there, and home prices in 2018 nearly doubled the national average. There are many attractive qualities for industry in Atlanta, and industry brings workers who need homes and could therefore increase demand even more.

  1. Indianapolis, IN
    Average home value: $161,600; YoY increase: 12.7%; Zillow 2019 YoY forecast: 5.8%

Indy is in one of the most affordable regions of the country, so even though home values are up, they’re still affordable for many Americans. There’s a strong job market here, and that will continue to attract people to the area.

  1. Charlotte, NC
    Average home value: $203,900; YoY increase: 11.5%; Zillow 2019 YoY forecast: 4.5%

Like Atlanta, Charlotte is proving itself to be a notable second-tier city, with amenities to attract city-lovers and suburbanites alike. The quality of life and potential for growth means that people are more than willing to put down roots here and use the equity in their homes to do so, whether that’s putting money back into their property, or paying off debts.

  1. San Jose, CA
    Average home value: $1,251,200; YoY increase: 11.2%; Zillow 2019 YoY forecast: 19.2%

You may have heard of San Jose as being the “hottest housing market in the U.S. for both 2018 and 2019.” While it’s not affordable for a large swath of Americans, those who live here probably aren’t looking to go anywhere anytime soon. This is the only city on the list where home values are actually expected to eclipse last year’s rate YoY increase.

  1. Dallas-Fort Worth, TX
    Average home value: $237,800; YoY increase: 11.2%; Zillow 2019 YoY forecast: 8.7%

Housing prices are rising faster than incomes in the Dallas-Fort Worth area, which means people may be reluctant to commit (or even qualify for) a refinance. Still, this may also mean that people are reluctant or unable to move into another home and would rather make the best of things where they are.

  1. Salt Lake City, UT
    Average home value: $352,300; YoY increase: 11.1%; Zillow 2019 YoY forecast: 6.1%

In Salt Lake City, supply has not kept up with demand, so buyers will continue to drive up prices, coupled with the city’s strong economic growth. Building in Salt Lake City is also somewhat constrained due to its geography, which puts further pressure on the market.

  1. Memphis, TN
    Average home value: $138,000; YoY increase: 10.2%; Zillow 2019 forecast: .92%

A lack of inventory is the primary driver of home price increases in Memphis. Current homeowners are stuck with nowhere to go, but a slowing housing market in Memphis could provide current homeowners with a limited window in which refinancing would be beneficial.

  1. Tampa, FL
    Average home value: $211,500; YoY increase: 10%; Zillow 2019 forecast: 7.1%

Tampa is another city on this list with a robust local economy fueling its growth. Although there has been a shortage of inventory in the area, Tampa Bay ranks higher than the national average in home starts.

  1. Orlando, FL
    Average home value: $233,700; YoY increase: 9.7%; Zillow 2019 forecast: 5.7%

The end of 2018 brought an increase in inventory to the Orlando housing market. While that typically tends to prevent home prices from rising too much, the landscape is a competitive one here, and so growth is still expected for 2019.

Although none of the top 10 fastest-growing markets are expected to keep up with the breakneck speed of 2018, there’s undoubtedly unrealized opportunities for many homeowners in these regions.