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More Affluent Homeowners Sought New Refinance Loans in Q1 2018

June 29, 2018 Zach South

A shift in the refinance market occurred from 2017 and Q1 2018, resulting in more affluent homeowners with increased home values and higher mortgage balances, seeking new refinance loans according to the Q1 2018 Mortgage Consumer Profile Report published today by Best Rate Referrals.

Low Rates Encouraged Refinancing to Lower Payments

In the summer of 2016, mortgage rates fell to 3.36% for 30-year fixed mortgages, hitting their lowest point since 2012. Shortly thereafter, many affluent homeowners refinanced their homes to receive an instant decrease in their monthly mortgage payments.

As Rates Rose, Home Values Did Too

Mortgage rates snuck up in 2017, but so did home prices. During 2017, the cumulative value of all homes in the U.S. increased 6.5%, adding billions of dollars of equity to homeowners across the country.

Increased Home Equity Encouraged a Growth in Cash-Out

As rates continued to rise into 2018, affluent homeowners transitioned away from refinance loans. Instead, these borrowers decided to take advantage of their new equity through cash-out refinance mortgages and home equity lines of credit (HELOCs). Due to this transition, we saw a large jump in average loan amounts compared to 2017.

Mortgage Values for Potential Refinance Borrowers Rose the Most in the Pacific & Mid-Atlantic

According to the Q1 2018 Mortgage Consumer Profile Report , the Pacific and Mid-Atlantic regions of the U.S. experienced the largest increase in average current home market value from 2017 to Q1 2018 for prospective borrowers inquiring about refinance mortgages. The smallest increases in home market values for this borrower group occurred in the East South Central and West South Central regions of the country.

Read More in the Just Published Q1 2018 Mortgage Consumer Profile Report

The new Q1 2018 Mortgage Consumer Profile Report, published by Best Rate Referrals, highlights mortgage market consumer trends, including:

  • Consumer-estimated credit scores by mortgage product and region
  • Home market values by mortgage product and region
  • Mortgage balances by mortgage product and region
  • Top consumer segments by mortgage product
  • Top consumer segment profiles (including demographic and behavioral attributes)
  • Marketing strategies for loan originators

Complete the form below to download your free copy of the Q1 2018 Mortgage Consumer Profile Report.

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About the Author

Zach South

Earning a spot on the 2018 HousingWire Rising Stars list, Zach South is one to watch. He has successfully established himself as a leader and innovator in the consumer finance industry, with several business ventures to back it up. Zach co-founded consumer finance marketing company Best Rate Referrals. He was also instrumental in building two of fastest-growing online loan marketplaces, MortgageAdvisor.com and LoanAdvisor.com. As Senior Vice President of Lender Operations, Zach oversees operations for DMS Consumer Finance and is responsible for managing an extensive portfolio of owned-and-operated, consumer finance focused properties. Throughout his dynamic career, Zach has remained passionate about connecting the right lenders with the right borrowers at the right time, repeatedly filling pipelines, improving closing ratios and scaling businesses for his clients.

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