Every few months, the Federal Reserve Bank of New York’s Center for Microeconomic Data releases a survey of consumer experiences. The survey is the result of panel data acquired directly from consumers when they apply for credit.
That survey covers a wide range of asset classes, from credit cards to auto loans, and even mortgages. The big news today is that the latest poll finds that rejection rates are on the decline across all credit applications, but not for mortgage refinancing.
The survey instead finds that more homeowners are getting their refi applications rejected. In fact, this rejection rate is the highest since the Fed began polling consumers about their credit experiences.
“The October rejection rate on mortgage refinance applications of 34.3% is the highest reading since the start of the SCE Credit Access Survey in October 2013. For 2018 overall, rejection rates for credit cards and credit card limit extensions and for mortgage refinancing exceeded those in 2017, while those for auto loans and mortgage applications were stable,” the Fed reports.
Of course, with interest rates rising, refinance applications are slowing down, too. For mortgage refinance applications, 2018 respondents reported a 6.8% likelihood of applying over the next 12 months, compared with 8.2% for 2017 respondents. Further, more and more Americans also report that they don’t plan to bother even trying to apply for a refi in the next 12 months.