Consulting Corner

Effects of Home Price Appreciation on Refinancing
By Mickey Storms

Refinance activity is at an all time high. Recently released data shows that new home sales and purchase activity also remain strong. A pair of dominant drivers of this activity is falling mortgage rates and the persistent increases in home prices that have resulted. The chart below helps quantify how powerful the effects of falling interest rates have been on home prices.

The line at the top of the chart depicts the steady fall in mortgage interest rates that has taken place since May of 2000. The lower line in the chart represents the cumulative change in the average >>>