The Real Deal Miami

More than one in five homeowners will refinance within year, data shows

October 09, 2012 03:00PM

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Fed Chairman Ben Bernanke

Despite the skepticism surrounding QE3, the Federal Reserve’s plan to buy up some $40 billion in mortgage bonds a month, new data cited by Bloomberg Businessweek shows that efforts of the Fed and the Obama Administration to mend the housing market are making a difference — keeping interest rates at record lows and boosting refinancing applications.

More than one in five borrowers will restructure their home loan within the next year; of that fifth, those who have at least 20 percent equity in their homes are the most likely to refinance. An estimated one in three will lower their interest rates over the next year if the Reserve holds its course, according to Lender Processing Services data analyzed by Businessweek.

 

And for those who are still underwater, the Obama administration’s Home Affordable Refinance Program has allowed for a 65 percent increase since the start of 2012 in the refinancing for those that own at least 20 more than their home’s value, Businessweek reported.

“You get more benefit when people buy homes. … It’s the purchases of new homes that generate the construction activity, the furnishing, all those things that help the economy grow,” Ben Bernanke,

Chairman of the Federal Reserve, said last month at a press conference. [Businessweek]Christopher Cameron

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