Home loan refinancing surges as mortgage rates hit new lows

LOS ANGELES (AP) — U.S. homeowners are seizing on the lowest average mortgage rates on record to refinance their mortgages.

Americans refinanced nearly 2 million home loans from January through April, more than double the same four-month stretch in 2019, according to real estate data company CoreLogic. And “cash-out” refinancing, when homeowners withdraw equity from their home's value, typically to pay down higher-interest debt or cover remodeling expenses, rose more than 70% from a year earlier.

Mortgage refinancings are outpacing home purchase loans this year, in part because the labor market fallout and economic uncertainty due to the coronavirus pandemic has put off some would-be buyers and sellers.

“The refi share is through the roof,” said Frank Nothaft, chief economist at real estate data firm CoreLogic. “It’s way up from a year ago and it’s accounting for the bulk of lending.”

Through the first four months of the year, about 1.9 million mortgages with a dollar value of $576.09 billion were refinanced, according to CoreLogic. They accounted for 64% of home loans during that period, the firm said. Of those, cash-out refinancings made up about 15% of all loans.

Refinancing can lower monthly payments and in some cases allow homeowners to tap additional cash from the equity in their home.

Mortgage rates have been falling for almost two years, in part due to the sharp pullback in the 10-year Treasury yield, which is a benchmark for interest rates on consumer loans, including mortgages. For much of last year, investor worries about a costly trade dispute between the U.S. and China, and Britain's decision to leave the European Union, drove up demand for bonds, pushing yields lower, and mortgage rates followed suit.

The average rate on the key...