【Freddie Mac】Quarterly Refinance Report

U.S. households own real estate worth over $25 trillion and have mortgage debt of just $10 trillion for over $15 trillion in net homeowner equity.¹ One way homeowners can tap their equity without selling their property is to take a cash-out refinance. Based on Freddie Mac’s Quarterly Refinance Statistics, “cash-out” borrowers, those that increased their loan balance by at least 5%, represented 83% of all conventional refinance loans; the highest share since the third quarter of 2007, but still lower than the 89% share reached during the third quarter of 2006. While the share of cash-out refinances is near its historical high, the total cash-out volume remains much lower than in the previous decade. Adjusted for inflation in 2018 dollars, in the fourth quarter, an estimated $14.8 billion in net home equity was cashed out during the refinance of conventional prime-credit home mortgages, down from the $20.4 billion a year earlier and substantially less than the peak cash-out refinance volume of $104.8 billion during the second quarter of 2006.

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