Refinancing Quietly Becomes Largest Driver of Tri-Cities Mortgage Activity

By DON FENLEY

The Tri-Cities outran the national mortgage market this past year, but the strength was in refinancing, not home buyers. Take refinancing out of the picture and the local market looks like everyone else’s – buyers squeezed by affordability. The refi flip points to a market that is deeply equity-driven rather than transaction-driven.

Here’s what this means. A booming total loan rate usually signals a hot market. This one doesn’t. When you separate the numbers by loan type, the region is feeling the same affordability squeeze as the rest of the country. The local surge in refinancing is papering over it, according to ATTOM’s Q1 Loan Origination Report.

A year ago, purchase loans were the biggest slice of local lending at 43%. Refinancing was just behind at 41%. During the first quarter of this year, refinancing was 49% of all loans, and purchases slipped to 38%. Refinancing has quietly become the largest driver of mortgage activity in the Tri-Cities, knocking home buying out of the top spot.

Refi loans jumped 41.6% in the Johnson City MSA and 26.6% in Kingsport-Bristol. That’s a 32.4% regional surge.

Regional home purchase loans slipped 2.6%, with Johnson City notably weak at −8.8%. That matches ATTOM’s national report that shows purchase lending fell to a 12-year low under the weight of elevated prices and higher mortgage rates.

Borrowers are also pulling back on home equity. HELOC lending fell in both metros. They were down 15.3% in Johnson City and 9.8% in Kingsport-Bristol. It’s another sign households are rate-sensitive and cautious.