Our own Andy Walden, economist and director of market research, visited CNBC’s The Exchange this afternoon to discuss Black Knight’s latest data on the refinance lending market.
Yesterday, Freddie Mac’s Private Mortgage Market Survey (PMMS) reported that the average 30-year mortgage rate had fallen to a historic low of 2.86%. According to McDash, Black Knight’s loan-level mortgage data set, this in turn pushed the population of high-quality refinance candidates to an all-time high of 19.3 million.
Black Knight defines high-quality refinance candidates as 30-year mortgage-holders with credit scores of 720 or higher, who hold at least 20% equity in their homes and are current on their mortgage payments and who stand to shave at least 0.75% off their first lien rate by refinancing.
Removing that eligibility criteria, there are 32.4 million 30-year mortgage-holders who are “in the money,” with current rates 0.75% or more above Freddie’s reported average. That represents three out of every four homeowners with a 30-year mortgage.
The average savings among high-quality refinance candidates is $299 a month – for an aggregate potential savings of of $5.8 billion per month if all 19.3 million were to take advantage of the opportunity, the largest aggregate savings total ever.
More than 7 million could save at least $300 on their monthly mortgage payment by refinancing, while nearly 2.5 million could save $500 a month or more.
Watch below as Andy, in conversation with Diana Olick and host Kelly Evans, assesses the scope and impact of this all-time high number of potential refinance candidates in the market given today’s record-low interest rates.