Refi Volume Falls to Lowest Level Since Last Year

The volume of refinances generated for Fannie Mae and Freddie Mac was 418,004 loans in May, according to a report from the Federal Housing Finance Agency.

It was the slowest month for Fannie and Freddie refinances since December 2012, when seller-servicers refinanced just 359,201 loans for the pair of secondary lenders.

Declining refinance activity reflects rising interest rates. The average conventional, 30-year, fixed-rate mortgage has risen to more than 4.6 percent in the U.S. Mortgage Market Index report for the week ended July 19 from less then 3.7 percent at the end of December 2012.

Government-sponsored enterprise refinances totaled 463,587 in April.

However, originators lifted their collective GSE refinance production from the same month last year, when there were 341,185 Fannie and Freddie transactions.

Refinances of just Fannie loans accounted for 264,093 of the latest activity, down from 284,654 in April.

Freddie’s share amounted to 153,911 transactions, fewer than the 178,933 loans refinanced a month earlier.

During the most-recent period, 84,648 of GSE refinances were closed through the Home Affordable Refinance Program.

HARP activity sank from April, when 106,910 loans were refinanced through the program.

But HARP business was up from May 2012, when production totaled 73,101 refinances.

Refinances on mortgages with loan-to-value ratios of more than 80 percent and up to 105 percent accounted for 50,857 HARP transactions in May, while loans with LTV ratios that exceed 105 percent and up to 125 percent made up another 18,054 of the loans.

Borrowers with LTV ratios in excess of 125 percent refinanced 15,737 loans in May.

California’s 368,905 HARP transactions were more than any other state in May.