California Home Loan Refinancing Levels Off

The number of California homeowners refinancing their mortgages has leveled off, according to TRW REDI Property Data, a real estate information company. Between January and September of this year, just under 850,000 refinancings originated by lenders in the state--slightly above the level of 834,000 recorded in the same period last year.

However, the figures, which cover the southern region of the state as well as the San Francisco Bay area, reveal significant regional variations in consumer demand for refinancing. The number of refinances dropped by 1% in Southern California compared to year ago, while it increased by more than 8% in the Bay Area. Los Angeles County recorded the largest drop, 7.3%, among the areas covered by TRW REDI.

Nima Nattagh, TRW REDI’s market analyst, notes that the slight decline in Southern California is attributable to two factors: a shrinking pool of homeowners who stand to benefit from historic low interest rates, as well as the the negative equity position that many homeowners find themselves in. Since the peak of the market in the late 1980s, home prices in Southern California have declined at a much higher rate compared to the other parts of the state.

Home Refinancing in the State

Jan.-Sept. Jan.-Sept. Percent 1992 1993 Change Los Angeles 256,515 237,853 -7.3% Orange 101,233 99,984 -1.2% San Diego 90,222 97,038 7.6% San Bernardino 47,616 51,374 7.9% Riverside 40,682 43,614 7.2% Ventura 26,875 26,021 -3.2% Santa Barbara 11,706 11,297 -3.5% S. California 574,849 567,181 -1.3% Santa Clara 63,278 72,438 14.5% Alameda 50,367 55,550 10.3% Contra Costa 41,795 45,873 9.8% San Mateo 27,588 29,042 5.3% Sonoma 19,969 19,833 -0.7% San Francisco 17,342 18,511 6.7% Solano 14,723 15,942 8.3% Marin 13,744 14,605 6.3% Santa Cruz 10,147 9,448 -6.9% Bay Area 258,953 281,242 8.6%

Note: Figures include second mortgages.