With over 65% of outstanding mortgage borrowers having note rates between 3.5% and 4.5%, these outstanding conventional mortgage borrowers are on the cusp of refinancibility, states Goldman Sachs. Marty Young and colleagues said in their July 1 research piece “The Mortgage Trader” that they believe a pickup in refi activity is virtually certain as mortgage rates are below 3.5%.
Borrowers who are slightly in the money are sensitive to rate changes
Young and team point out that over 65% of current 30-year mortgage borrowers have note rates between 3.5% and 4.5%. They note that such a large fraction of outstanding conventional mortgage borrowers are on the cusp of refinancing and hence, any further drop in rates could elicit significant additional refi volumes:
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