Refinance Trends in the Mortgage Market for 2020

This Research Note presents an analysis of refinance trends in the mortgage market for the year 2020. The document outlines how, despite the economic challenges posed by the COVID-19 pandemic, refinance activity surged due to historically low mortgage interest rates. It details that refinance volume reached its highest annual total since 2003, with approximately $2.6 trillion in refinance originations. The report highlights that borrowers saved significantly by refinancing, with an average reduction in mortgage rates of over 1.25 percentage points. It also notes an increase in repeat refinances, particularly in high-cost metro areas, and discusses the cash-out refinance trend, where borrowers extracted equity from their homes. Additionally, the document provides statistical data on average borrower savings and the distribution of refinancing choices, including the preference for fixed-rate loans. Overall, the Research Note captures key metrics and trends that defined the refinance landscape in 2020.