Rates are near all-time lows, but despite this, homeowners are not refinancing their homes, a new report from Black Knight Financial Services shows.
The population of borrowers eligible to refinance rose to 8.7 million at the end of June, yet prepayment speeds actually fell by 12% in July, the report states. Prepayment speeds are usually a good indicator of refinance activity.
The national delinquency rate also rose 5% in July, the first rise above 4.5% since February.
Other sources, such as SP Dow Jones Indices and Experian also reported an increase in mortgage delinquency in July.
Black Knight’s report says that the increase could be due to July’s calendar — July ended on a Sunday, and therefore any payments made on the last two days of the month can’t be processed until the following month.
And July’s decline will likely impact the numbers for August, as it’s typical to see only a partial recovery the following month, the report states.
On a positive note, July’s foreclosure starts came in at 61,300, a 12% decline from last month and the second lowest monthly total in 10 years. Foreclosure inventory fell as well, decreasing 20% from last year and hitting its lowest level since July 2007.
This supports conclusions found by a Corelogic report showing that foreclosure starts are finally back to housing-boom levels.