TheMReport — News and strategies for the evolving mortgage marketplace.
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10 | TH E M R EP O RT MDWELL I t's no secret that interest rates are in flux and will likely rise in 2017 as we transition with the new administration. What will be the implications of rising interest rates for lenders and their custom - ers? HouseCanary reviewed the mortgage market to find out, and the results are significant. The total U.S. mortgage market is valued at nearly $14 trillion dollars, and $1 trillion of those loans are potential refinance opportunities.* It's clear that there are real dollars at stake—$36 billion in an - nual savings to be exact, and 5.5 million households will benefit from refi opportu- nities. The news is good for lenders and homeowners alike. When we take a closer look, the data tells an urgent story. Since the presi - dential election, interest rates have risen approximately 60 basis points, resulting in a loss of a half trillion dollars in refi opportunities. If interest rates rise by 40 additional basis points the result is a total loss of over $840B in refinance opportunity. Fortunately, the magnitude of the mortgage market means there is still substantial op - portunity for lenders with knowledge of their local market to participate in the next Total Principal By Rate Interest Rate $1.5T $1T $831B $688B $571B $471B Approx 1 Percent Rate Increase $840B in principal lost $373B $273B $186B $116B 3.54% 4.13% 4.25% 4.50% 4.75% 5.00% 5.25% 5.50% 5.75% 6.00% -$0.5T -$0.3T $1 TRILLION IN LOANS AVAILABLE FOR REFI Refi Opportunities Abound Multnomah OR 25,127 $3.9 B Salt Lake UT 24,992 $3.5 B San Francisco CA 24,991 $7.1 B Montgomery MD 24,114 $5.4 B Oakland MI 23,946 $3.3 B Ocean NJ 23,533 $3.8 B Lee FL 23,036 $3.5 B Pierce WA 22,884 $3.4 B DuPage IL 22,726 $3.4 B Essex NJ 22,599 $4.6 B District of Columbia DC 22,179 $5.4 B Bucks PA 21,946 $3.3 B Nassau NY 21,556 $4.6 B Morris NJ 21,185 $4.1 B Worcester MA 21,076 $2.9 B Montgomery PA 21,028 $3.9 B Richmond NY 20,842 $4.0 B Kings NY 20,551 $5.0 B Plymouth MA 19,699 $3.2 B Franklin OH 19,534 $2.4 B Collier FL 19,026 $3.8 B Barnstable MA 18,996 $3.6 B Philadelphia PA 18,781 $2.5 B Washington OR 18,757 $3.0 B Chester PA 18,497 $3.1 B List continues on next page… REFI POTENTIAL BY MSA : # 1-25 "Currently, 40 percent of all refinance opportunities are accessible by the top 25 lending institutions— totaling 2.8 million refinance initiatives. 60 percent of these opportunities are still up for grabs, with the next 100 lending institutions, representing 990k loans and an additional 3.4 million loans are ripe for the taking. The cup is still half full but opportunities will dwindle as interest rates climb." —Jeremy Sicklick, CEO, HouseCanary STATE COUNTY NUMBER OF REFI OPPORTUNITIES TOTAL PRINCIPAL VALUE Understanding the local refi market potential across the nation