Mortgage refinancing of Fannie Mae- and Freddie Mac-backed loans plummeted to a six-year low during the first quarter, as escalating mortgage rates dried up demand.
During the first three months of the year, the agencies refinanced 370,856 mortgages, the lowest level of activity since 2008, according to a report from the Federal Housing Finance Agency, the overseer of Fannie Mae and Freddie Mac. That compares with more than 506,000 loans in 2013’s fourth quarter and almost 1.4 million loans in 2013’s first quarter.
Average mortgages this year have ranged from 4.3 percent more than 4.43 percent, according to Freddie Mac, compared with rates of around 3.5 percent in the first quarter of 2013.
The FHFA also said that demand for refinancing made under the Home Affordable Refinance Program declined substantially from 2013’s fourth quarter but there continued to be significant interested in the program in states where many homeowners remain underwater in their mortgages. That included Illinois, where HARP mortgage refinancings accounted for 31 percent of all activity in the first quarter.