There are only two reasons to refinance your house right now.

  1. You’ve been in a coma for the past 10 years and were medically incapable of refinancing at near-zero rates, so you have to take what you can get now that they’re higher.
  2. You need more borrowed money, now, to pay bills or keep spending like you want to. So you have to give back any equity you’ve built up, and strap on a fresh 30-year debt bag just to maintain your standard of living.

The chart says is it all. Almost two-thirds of all refi money is now cashed out. Those responsible for the remaining third? Let’s wish them well as they recover from 10-year comas.

Because the current de facto American solution is never to scale back consumption. Just go further into debt, press that leverage, and assume the mistakes you’ve made to get to this point will somehow be fixed by doing more of what you’ve done to get here in the first place.


It makes little sense to refi at these rising rates. But here we are. With mortgage rates rising, one would expect refi activity to slow.

And it has: Refi Applications are at an 8-Year Low[1].

At these rates, refi activity should be in the low single digits. Yet, 36% of mortgage applications are refis. Are people pulling money out of their houses to pay bills?

That's how it appears, as Cash-Out Mortgage Refis are Back[2].

What's Going On?...

  1. People feel wealthy again and are willing to blow it on consumption
  2. People pulling money out to invest in stocks or Bitcoin
  3. People are further and

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