Data from Black Knight’s report showed that overall rate locks edged up 1.3% from July, driven by a 7.6% jump in cash-out activity. The increase was enough to push the overall refi share of the market back to 50% for the first time since February. Locks on purchase loans and rate/term refis remained flat in August, down 0.5% and 0.8%, respectively.
“The rise in cash-out lending is hardly surprising given the extraordinary growth we’ve seen in tappable equity this year,” Happ said. “We’ve now seen cash-out activity increase for three consecutive months, and with $173,000 in equity available to the average homeowner with a mortgage and home prices still climbing, there is still room in the market for growth.”
With equity levels at record highs and interest rates projected to climb in coming years, Happ expects cash-out lending to play a much larger part in the overall refinance market.