Home Refinancing Plummets, Construction Loans On The Rise
Homeowners are refinancing far fewer mortgages, choosing instead to opt for remodeling and renovating.
New mortgage numbers released Thursday from ATTOM Data Solutions show 1.9 million new mortgages were filed last quarter, a drop of almost 20 percent from a year ago. But, it’s not from a lack of new home buying. Purchases remain steady, dropping just 1 percent nationally and in Phoenix. Refinanced mortgages dropped 35 percent nationwide last quarter.
“The best opportunity to refinance has gone by the wayside because of rising interest rates,” said Daren Blomquist, senior vice-president of ATTOM Data Solutions.
Meanwhile, construction loans, used to pay for major remodeling projects, reached a two-year high nationwide. In Phoenix, construction loans were up 13 percent over the previous quarter as homeowners are choosing to stay put.
“A new home has lost its luster a little bit. Sometimes with these new homes, you don’t have some of the amenities you get with the older homes, the main one being location,” Blomquist said.
Blomquist noted data show Phoenix is still a good market for buying homes and getting loans, even though interest rates are expected to rise.