California’s state-wide stay-at-home-order has rendered open houses obsolete. Realtors will not be planting sandwich boards on the sidewalk or enticing buyers with the scent of freshly baked cookies any time soon. But record-low mortgage interest rates have caused an onslaught of Los Angeles homeowners to submit refinance applications as they seek to lock in those favorable rates.
According to a survey by LendingTree published this week, Los Angeles has seen a 345 percent jump in refinance applications when compared to the same time last year. A total of four California cities made the top 10 list of US markets that have yielded the most refinance application growth. San Francisco took the number one spot with 417 percent, San Jose came in at number three with 394 percent, San Diego ranked eighth with 360 percent, and Los Angeles nabbed tenth place.
“A mortgage refinance, particularly at these historically low rates, presents an attractive opportunity for homeowners,” said Tendayi Kapfidze, LendingTree’s chief economist.
“Compared to a year ago when rates were 1 percentage point higher, consumers save nearly $60 per month — or $700 per year in payments — for every $100,000 borrowed. Interest savings add up to about $20,000 over the 30-year term of a typical mortgage.”
Refinancing is particularly popular in cities and states where homeowners have higher-than-average credit scores and the opportunity for home price appreciation is high. Last year, the average home value in California increased by a robust 3.9 percent.