Homeowners now have a new reason to refinance, and it may just be the secret weapon the mortgage industry needs to survive this alarming refi drought. Home prices have reached record-high in many top metros, but if you have paid attention to any local realtors, to CoreLogic, or to housing experts and economists here, here, and here, many of these markets are overvalued and are expected to correct. In ValueInsured’s latest quarterly survey, 68% Americans believe a housing correction will happen within 2 years. Interestingly, the consumer survey was conducted before releases of the Zillow and Wall Street Journal economist panel reports, but their prediction timeline mirrors those of the experts’.
 
Historically, homeowners’ choice when faced with a potential correction is to sell (but then where would they live?), or to stay put and risk watching their home value depreciate in the near future. Those are hardly good options and the bottom line is, the homeowner themselves have little to no control.
 
Now, they have a third option…

The MBA forecasts refinance volume will decline by 30% in 2018. In other words, while homeowners have a lot more equity at their disposal, fewer will be accessing that available cash. Why?

Amid CoreLogic’s monthly reminders that nearly half of the nation’s top housing markets are overvalued, Fannie Mae’s latest HPSI continues to report housing sentiment “volatility”. According to Fannie Mae’s survey, the net share of respondents who believe home prices will go up in the next 12 months decreased 3 percentage points in March. The latest ValueInsured Modern Homebuyer Survey echoes the same cautiousness in home price sustainability, particularly among homeowners.