Local demand for refinance mortgages dropped by half in 2014

Mortgages for new homes in Sedgwick County increased slightly while mortgage refinance loans fell by half between 2013 and 2014.

That’s according to reports by CoreLogic, a California-based financial services information and analytics firm, and provided to The Eagle by Fidelity Bank, which in 2014 assumed the top lender spot in total number of transactions and total dollars.

The reports showed new-home mortgages increased 3.6 percent to 231 among the county’s top 10 mortgage lenders in 2014, compared to 2013.

Mortgages for the purchase of existing homes were down 6.8 percent in the same period, the reports said, dropping to 2,229 from 2,392 in 2013. At the same time the number of refinance loans fell 53 percent to 1,743.

“Rates have been good, and good for a long period of time,” said Jack Ronen, Fidelity’s residential lending manager. “One recent change in that dynamic is the makeup of the borrower changed from refinance to purchase.”

The decline in refinance mortgages were reflected in the total amount of mortgage loans made among the 10 lenders: $909.3 million in 2013 compared with $697.2 million in 2014, a 23 percent decrease.

“Refinancing did drop off completely,” added Mitch Crouch, senior vice president and head of the Wichita market for St. Louis-based Pulaski Bank, which ranked 10th in Sedgwick County mortgage lending in 2013 and 2014, according to the CoreLogic reports.

Pulaski’s refinance loans dropped from 47 to 21 during the period, according to the reports.

Ronen, of Fidelity, said he thinks that the decline in refinance loans was driven by interest rates that hit a low in the first half of 2013 and began to move slightly higher in the second half of 2013.

“Refinances are rate driven,” he said.

Ronen said falling rates will prompt people to refinance their homes to get a lower monthly house payment. But those same lower rates wouldn’t necessarily prompt people to buy homes.

Fidelity’s refinance loans between 2013 and 2014 declined 69 percent, to 164.

Crouch said the drop in refinance loans may also reflect a market that in 2014 was tapped out by refinance loans.

“I think everybody who thought about refinancing, did it,” Crouch said.

This story was originally published February 23, 2015 at 5:17 PM with the headline "Local demand for refinance mortgages dropped by half in 2014."