CoreLogic’s June report finds that loan refinancing doesn’t make sense for a lot of current homeowners in the U.S.

Forecasts predict mortgage rates will increase this year, so CoreLogic used its data to determine refinancing conditions, mortgage denial rates and the overall health of the housing market throughout the nation.

  • Loan originations have declined by 60 percent since 2005, when there were 11.7 loan applications for single-family homes.
  • D.C. had a reported increase of 1.4 percent in April 2016 over March and a 3.1 percent increase over the same month last year.
  • Home prices in the District of Columbia are expected to increase by 3.9 percent by next April.

CoreLogic’s June report finds that loan refinancing doesn’t make sense for a lot of current homeowners in the U.S.

Forecasts predict mortgage rates will increase this year, so CoreLogic used its data to determine refinancing conditions, mortgage denial rates and the overall health of the housing market throughout the nation.

As of May 12, 2015, the monthly average commitment rate was reported at 3.57 percent. A good rule to follow for refinancing is to add 100 basis points onto the current rate, which would bring it to 4.57 percent.

Most borrowers held mortgages around 4.50 percent in May, just slightly below the threshold that makes sense for refinancing. And if mortgage rates continue to climb this year as predicted, about 5.5 million borrowers will find refinancing to be an unappealing option.

Mortgage loan applications low

Although refinacing is down, loan origination is also significantly lower than it was 10 years ago. In 2005, there were 11.7 million loan applications for single-family homes. By 2011, that figure dropped to the lowest point in a decade, at 3.6 million.

While it has since upticked to 4.6 million by 2014, there is still a 60 percent drop in mortgage loan applications since the peak of 2005. During the same time period, the number of denials of mortgage loan applications also dropped significantly.

In 2007, 18.7 percent of mortgage loan applications were denied, and 13.2 percent of applicants were denied by 2014.

applications

Mortgage delinquency falling

In April 2016, the number of seriously delinquent loans (SDQ) fell in April 2016 to 1,135, which is the smallest pool seen in the past year, according to CoreLogic. The April figures show a 21.6 percent annual decline and a 2.8 percent monthly fall.

Foreclosure inventory also dipped to 406 in April, a 3 percent dip monthly and 23.4 percent fall annually. Completed foreclosures also fell annually, but increased a sliver over March. There were 37 completed foreclosures reported in the month of April, just one more than in March but 15.8 percent less than the previous year.

HPI overview

Modest home price increases in D.C.

The District of Columbia continues to push forward with modest but consistent home price increases. Home prices in the nation’s capital posted an increase of 1.4 percent in April 2016 over March and a 3.1 percent increase year-over-year.

Looking to the future, home prices are expected to increase by about 0.7 percent by May. The rest of the year will prove to be a bit more action-packed for home prices, as CoreLogic forecasts an increase of 3.9 percent by April 2017.

foreclosure

Email Kimberly Manning

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