Home refinancings decline but more increase mortgage
Freddie Mac said mortgage refinancings fell to 20 percent of the market in the first quarter of 2000, down from 50 percent in the first quarter of 1999. But while fewer customers refinanced, 79 percent of those who did took mortgages for at least 5 percent higher than their original mortgages, up from 57 percent last year.
"Although refinancing has dropped off, a larger share of those refinancing their mortgages took out equity," said Vassilis Lekkas, principal economist for Freddie Mac. "As expected, climbing mortgage rates made refinancing less attractive in the first quarter of 2000, since most homeowners who were able to refinance their original loan did so in the recent past when mortgage rates were almost two points lower than they are now."
Freddie Mac's Conventional Home Price Index shows the national average growth in the value of housing to be 27.6 percent over the past five years. Properties refinanced in the first quarter showed a median house-price appreciation of 27 percent, up from 11 percent last year. Median age of the original loan was 6.6 years, compared with five years in 1999.