The low mortgage rate environment has created an incentive for homeowners to refinance. But fewer and fewer of them are doing it through the government’s Home Affordable Refinance Program. The total number of refinances completed through HARP now stands at approximately 3 point 42 million as of the end of June 2016, according to FHFA’s Q2 Refinance Report released Thursday.
The total refinance volume increased in June, but the 18,310 borrowers who refinanced through HARP in the second quarter represented only 4 percent of total refinances—the lowest share for HARP since Q2 2009, when the program was launched. FHFA estimates that more than 320 thousand borrowers nationwide are eligible to refinance through HARP. The program is scheduled to expire at the end of the year.
The second quarter presented a set of mixed housing fundamentals, according to Fannie Mae’s August Economic and Housing Outlook. Home sales performed well during the second quarter; in June, both new and existing-home sales rose to post-crisis highs. But tight inventory from a lack of new construction continues to create affordability challenges, particularly at the lower end of the market, where first-time buyers are getting squeezed out by competition for houses.