By Matt Jarzemsky
Published May 05, 2011| Dow Jones Newswires
Three-fourths of homeowners who refinanced their mortgage in the first quarter either maintained their principal balance or reduced it by paying extra money at the closing table, Freddie Mac (FMCC) said Thursday.
The portion maintaining about the same loan amount, 54%, was the highest since at least 1985, when Freddie began keeping records, it said.
Meanwhile, 21% of refinancing homeowners reduced their principal balance. That was down from the 46% Freddie had reported for the fourth quarter in a January statement, which represented the highest portion on record.
The data are a further indication of U.S. consumers’ recent efforts to deleverage, taking cash they would normally spend and instead paying debtors.
“Consumers continue to reduce their debt, either by paying down or paying off their mortgage loan, or reducing the interest cost,” Freddie Chief Economist Frank Nothaft said. He noted that homeowners’ financial-obligation ratio, which peaked in the third quarter of 2007, had dropped by the end of 2010 to a level not seen in a decade.