It is expected that 35% of all new mortgages in 2019 will be made up of refinanced mortgages, according to a report from Fannie Mae (FNMA) out on Thursday.

This is up from 29% in 2018 and suggests the Federal Reserve’s rate cut of 25 basis points last month may lead to significant savings for more people interested in refinancing.

“Mortgage rates are approaching the lowest level in recent decades, and as they have moved lower more and more homeowners are finding incentive to refinance,” said Fannie Mae’s Chief Economist Doug Duncan. “We estimate that 35% of outstanding mortgages are now ‘in the money,’ meaning borrowers may realize significant cost savings by refinancing; as such, we expect the share of refinance originations to grow through the remainder of the year.”

Fannie Mae’s report also predicts the Fed will cut rates twice more by a quarter-point each this year, up from a prediction of one. Duncan warned of “reverberating trade tensions and general economic uncertainty [that] continues to weigh on growth.”

Fed Chairman Jerome Powell stressed that the Fed’s rate cut was not the beginning of a cutting cycle, while still attempting to leave open the possibility that the Fed could cut rates again this year. The inversion of the yield curve — which often precedes a recession — makes this tightrope more difficult to walk, and may support Fannie Mae’s assumption that the Fed will be fairly aggressive in its cutting.

This could be good news for people interested in refinancing their mortgages, but a larger housing crisis in the United States persists. Put simply, there is not enough housing stock available, especially in large, coastal cities where many Americans are moving.

“While existing homeowners may be able to enjoy the benefits of lower interest rates, many would-be homeowners, and the purchase mortgage market generally, remain unable to capitalize on the favorable rate environment due to the chronically limited supply of homes available for sale,” Duncan said.

Calder McHugh is an Associate Editor at Yahoo Finance. Follow him on Twitter:@Calder_McHugh.

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