Government-sponsored enterprise refinance volume fell to the second-lowest level in nearly six years — though interest rates are nearing a critical threshold.
Mortgage lenders refinanced 107,320 Fannie Mae and Freddie Mac home loans during May. Volume declined from the previous month, when activity was up and 117,296 mortgages were refinanced.
The only month since November 2008 that GSE refinance volume has been slower was in March of this year, when just 105,110 refinances closed.
Activity has seriously slumped compared to the same month last year, when GSE refinances numbered 417,997.
The production data was produced by the two secondary lenders’ regulator, the Federal Housing Finance Agency.
A graph provided by FHFA indicates that refinance activity began to turn sharply lower as rates headed towards 4 percent. Freddie reported that 30-year fixed rates averaged 4.13 percent this week.
Washington, D.C.-based Fannie’s share of May volume was 66,983, while Freddie refinances totaled 40,337.
There was a similar trend for refinances that were completed through the Home Affordable Refinance Program, with HARP volume falling to 16,565 from 19,688 in April. HARP production totaled 84,650 in May 2013.
Since April 2009, when HARP was launched, there have been 3,171,138 refinances completed through the program — including 957,899 mortgages with loan-to-value ratios in excess of 105 percent.
FHFA noted in the report that delinquency has been lower for borrowers who refinanced through HARP than for HARP-eligible borrowers who did not refinance.
Fannie loans refinance through HARP numbered 9,857 in May, while McLean, Va.-based Freddie had 6,708 HARP transactions.
