Interest in refinancing surges as homeowners explore equity options

With interest rates decreasing and home values at record highs, many homeowners are interested in refinancing or accessing their equity. Refinancing applications surged by 127% in September compared to the same month last year.

A study by Eden Emerald Mortgages analyzed all 50 states to identify areas with high interest in refinancing. The analysis was based on Google searches for terms like "refinance deals" and "HELOC rates." New Hampshire and Maine lead the list of states where residents are most actively seeking refinancing options.

Hannah Jones, a senior economic analyst at Realtor.com®, explains that these top two states have experienced faster-than-average home price growth over the past decade. "Homeowners who have seen a significant boost in equity, but do not wish to sell, may be interested in tapping into this equity to upgrade their home or otherwise improve their financial situation," she says.

Jones notes that while interest rates are falling, they remain higher than 84% of existing mortgages, which typically have rates below 6%. Therefore, most mortgage holders would not benefit from refinancing if their goal is to lower monthly payments. However, those planning to stay put might consider using a home equity loan or line of credit.

Shaun Bettman, CEO of Eden Emerald Mortgages, agrees that homeowners often refinance for reasons beyond securing a lower rate or reducing monthly payments. He suggests considering a switch from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage for stability or shortening the loan term from 30 years to 15 years for quicker repayment.

Bettman advises assessing long-term financial goals before deciding to refinance: "If you want to reduce your monthly payments, aim to lower your interest rate."

Richard Redmond from Redmond Mortgage Capital highlights differences between rural and urban areas regarding refinancing needs. In densely populated states like Florida and California, numerous mortgage brokers and banks offer refinancing services without needing extensive online searches.

New Mexico recorded the fewest refinance-related searches with only 205.26 per 100,000 residents.

The top ten states with the highest number of refi-related searches adjusted for population include:

1. New Hampshire: 674 searches per 100,000 population; median list price $575,000.

2. Maine: 669 searches; median list price $450,000.

3. North Dakota: 631 searches; median list price $364,625.

4. Colorado: 610 searches; median list price $599,500.

5. Utah: 594 searches; median list price $599,900.

6. Vermont: 591 searches; median list price $499,000.

7. Montana: 582 searches; median list price $649,900.

8. Idaho: 576 searches; median list price $572,400.

9. Wyoming: 576 searches; median list price $479,750.

10. Oregon: 570 searches; median list price $572,705.