By Aldo Svaldi
The Denver Post
Borrowers made big push to lock in equity gains on homes ahead of interest rate hikes
Metro Denver homeowners burned with refinancing fever in the fourth quarter, according to an analysis on mortgage activity from RealtyTrac.
Denver area residents refinanced 28 percent more mortgages during the last three months of 2015 than they did in the same period in 2014.
That was the fourth-biggest jump among the 65 metro areas that RealtyTrac studied with 5,000 or more loan originations and way ahead of the 2 percent increase in mortgage refinancings measured nationally.
Three Tennessee cities ranked ahead of Denver — Nashville up 80 percent, Knoxville up 46 percent and Memphis up 31 percent.
Other cities with big gains in refinancing activity included Grand Rapids, Mich., up 25 percent; Fort Meyers, Fla., up 23 percent; and Portland, Ore., up 21 percent.
Des Moines, Iowa; Tulsa, Okla., and Albuquerque all had 19 percent gains.
Borrowers who refinanced might have been trying to get ahead of a Federal Reserve interest rate hike in December. A more likely motivation was a move to capture equity after a big run-up in home prices.
“In many of the major metros with a big increase in refinancing originations, the common denominator is home prices that have reached new peaks or are at least close to their previous peaks,” said Daren Blomquist, a vice president at RealtyTrac.
Denver differed from the Tennessee trio and other cities with heavy refinancing activity in that mortgages taken out to purchase residential properties didn’t increase. Those actually dropped 3.3 percent in metro Denver, which lines up with reports on sluggish home sales in the final months of last year.