Total mortgage refinance volume decreased in July 2017 as mortgage rates in June remained above the lows observed in 2016 according to the latest FHFA Refinance Report.

Overall U.S. mortgage rates increased in July as the average interest rate on a 30-year fixed rate mortgage rose to 3.97 percent from 3.90 percent in June.

FHFA mortgage vs refinance rates July 2017
Number of U.S. mortgages refinanced vs refinance volume by FHFA through July 2017

Key takeaways from the report year to date through July 2017:

  • Borrowers who refinanced through HARP had a lower delinquency rate compared to borrowers eligible for HARP who did not refinance through the program.
  • Nine states and one U.S. territory accounted for over 60 percent of the Nation’s HARP eligible loans with a refinance incentive as of March 31, 2017.
  • Borrowers completed 2,305 refinances through HARP, bringing total refinances from the inception of the program to 3,473,109.
  • HARP volume represented 2 percent of total refinance volume.
  • Seven percent of the loans refinanced through HARP had a loan-to-value ratio greater than 125 percent.
  • Borrowers with loan-to-value ratios greater than 105 percent accounted for 19 percent of the volume of HARP loans.
  • Twenty-six percent of HARP refinances for underwater borrowers were for shorter-term 15- and 20-year mortgages, which build equity faster than traditional 30-year mortgages.
  • HARP refinances represented 6 or more percent of total refinances in Nevada, and Florida, double the 3 percent of total refinances nationwide over the same period.

Overview of the Home Affordable Refinance Program (HARP) FHFA Refinance

HARP was established in 2009 to assist homeowners unable to access a refinance due to a decline in their home value.

The program is designed to provide these borrowers with an opportunity to refinance by permitting the transfer of existing mortgage insurance to their newly refinanced loan, or by allowing those without mortgage insurance on their previous loan to refinance without obtaining new coverage.

On August 17, 2017, HARP was extended once more to expire on December 31, 2018.