Black Knight: Rising Rates Take Huge Chunk of Borrowers Out of ‘Refinanceable’ Population

Black Knight Financial Services, Jacksonville, Fla., said the recent surge in the 30-year fixed mortgage rate knocked another 700,000 homeowners out of the “refinanceable” population.  

Freddie Mac reported the 30-year fixed rate rose to 4.13 percent on Dec. 8; the Mortgage Bankers Association reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to its highest level since October 2014, 4.27 percent, from 4.23 percent, with points decreasing to 0.37 from 0.41 (including origination fee) for 80 percent loan-to-value ratio loans.  

Black Knight said the number of people of borrowers who could both benefit from and likely qualify for a refinance fell to 3.3 million borrowers at the end of October, a 60 percent drop (down 5 million) since the beginning of November. The refi population has only been below this point twice in recent history: Dec. 2013 and Jan. 2014 (when rates were above 4.4%). Refi origination volume that quarter (Q1 2014) was the lowest in the past 10 years and 60% below that in the third quarter of this year.