Remember the days of 3% mortgage rates? As a relieved nation emerged from the Covid-19 pandemic in 2021, along with it came those historically low average mortgage rates below 5.00%, 4.00% or even sub-3.00%. But as inflation began to increase so too did mortgage rates, rising to nearly 8.00% in 2023 and 2024, their highest in almost two decades.
But while average mortgage rates have now leveled off to around 7.00%, and a majority of mortgage holders are sitting tight on those dreamy rates of early ‘20s, inflation has cooled and overall we’ve seen rates come down into the sixes and low sevens, which has provided an environment for some who bought at those higher rates, to refinance.
Mortgage lender LendingTree recently released a report analyzing its own mortgage refinance offers given to users of its online marketplace and compared how they’ve changed since 2023.
Here are some of the results of their analysis:
- Nationwide, the share of 30-year, fixed-rate mortgage refinances offered to users of the LendingTree marketplace jumped by 41.59% from September 2023 to September 2024.
- APRs on offered mortgage refinances fell by 156 basis points from an average of 8.19% in September 2023 to an average of 6.63% in September 2024. This decline in rates helped reduce the average monthly payment on offered loans by $136, even though average loan amounts increased by $16,245.
- The share of mortgage refinance offers increased by more than 100.0% (more than doubling) in 10 states—West Virginia, Connecticut, Oklahoma, Illinois, Iowa, Indiana, New Jersey, Arkansas, New Hampshire and Maryland.
- Of the 10 states where refinance offers jumped the most, West Virginia, Connecticut and Oklahoma saw the largest increases. Refinance offers more than tripled in West Virginia, jumping by 235.69%.
Economists note however that the market is ready for an inventory reset, with homeowners who have been holding on to those lower rate mortgages, ready to come off the fence when the numbers resume their downward trend.
“Rates are expected to generally move lower in the coming months, despite recent volatility,” said Hannah Jones, Realtor.com senior economic research analyst, in a recent statement. “Stronger-than expected economic data, including robust employment data and stubborn core inflation, have prevented downward progress in mortgage rates over the last month. The antidote to the recent climb will be if upcoming economic data falls more in line with expectations.”
At the same time, LendingTree cautions, If mortgage rates continue their downward trend over the next six to 12 months, refinancing will likely remain a hot topic. “While many people will be able to take advantage of falling rates and make their mortgages more affordable by refinancing, many won’t. We shouldn’t expect refinancing to become anywhere near as popular as it was just a few short years ago when mortgage rates were at record lows,” noted the author of the report.
You can check out the full report here: https://www.lendingtree.com/home/mortgage/refinance-offers-study/
