Is ReFi activity slowing?

Prior to July 2003, mortgage refinancing activity seemed to track movements in interest rates fairly closely. Since then, however, homeowners have been less than responsive.


Have we hit the limits to growth in the refi market? If so, it may be another hint that the home-as-ATM phenomenon has come to an end.

The real question is whether homeowners are scaling back of their own accord — or whether circumstances have forced them to.

What's been said:

Discussions found on the web:
  1. Chad K commented on Jun 10

    I’ll speak for myself, some friends and co-workers in saying… while the current rates are excellent… there’s not much benefit in paying $2000 in closing costs to get a monthly savings of $50.

    In the end, most of us are better off arguing with the state about the tax appraised value of the house.

    I know many people used home-eqs to pay for entertaining things… and some to pay off other debt (or as an alternative to a car loan)… but I still think the vast majority of re-fis were simply to save money… not for the house-as-an-ATM, as most people tend to think.

  2. CalculatedRisk commented on Jun 10

    As Chad mentioned, the spread between the owners existing loan and a new loan is probably insufficient (since most people already refi’d) to make it worth the effort.

    But equity withdrawal (aka Home-as-ATM) has continued even without the same level of Refis. HELOCs have really grown in the last 2 years. Here is a recent article on HELOCs (mostly Orange County and California):

    Best Regards!

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