Deschutes County’s rising home prices ranked it once again among the nation’s housing markets with the greatest price appreciation in the second quarter, according to data released Tuesday by the Federal Housing Finance Agency.

Increasing home values have also lifted homeowners in Bend and elsewhere above water on their mortgages, according to home finance experts and federal data. Many homeowners are opting to sell and buy up, rather than take advantage of government refinance programs.

“If you can get to a point where you can sell and get from underneath your home, it’s a better purchase market,” said Rockland Dunn, mortgage production manager for Bank of the Cascades.

He and Adam Thomas, regional production manager for U.S. Bank home mortgages, said demand for once-popular refinancing packages is down. Homebuying, however, is up, they said.

“We have seen strong demand in mortgages for new home purchases, which we also believe is a good sign,” Thomas wrote in an email.

FHFA data shows the number of Central Oregon homeowners eligible for a federal program to refinance underwater mortgages dropped to 498 in March from 1,739 a year prior, according to the Home Affordable Refinance Program, or HARP. Deschutes County had the most eligible homeowners, 396, in the three counties. Ninety-one of them resided in the 97701 ZIP code.

Statewide, the number of eligible homeowners dropped 77 percent during the same time period.

The program’s popularity accounts for some of the drop in numbers. However, the rise in home prices in the last year probably lifted many mortgage holders out of HARP eligibility, Dunn said. With a year-over-year increase of 19 percent, the Bend-Redmond Metropolitan Statistical Area ranked eighth in the nation for its pace of rising home prices, according to the second-quarter data released Tuesday by the FHFA.

HARP, started in 2009 during the real estate crash, sought to help homeowners who owed as much, or more, on their homes than they were worth because of plummeting prices. The program allowed homeowners to lower their mortgage interest rates, and their monthly payments.

“I think the important piece is that (home) values have increased and not as many people have a need for this,” Dunn said.

He said Bank of the Cascades refinanced plenty of home mortgages through HARP two years ago, but not so many today. In fact, refinancing of home mortgages is down altogether, he said. “It might be 20 percent of our business; last year it might have been 60 percent,” he said.

HARP is still a good program for those who qualify, he said. “If you have the ability or the need, I don’t know why you wouldn’t do it.”

Lynne McConnell, associate director of the HomeSource program for NeighborImpact, said only mortgages sold to Fannie Mae or Freddie Mac are eligible for HARP, and mortgage holders may only have one late payment no earlier than six months before the application.

“Most folks find it a lot easier to go in-house, if they can qualify through their lender,” McConnell said. “There are fewer requirements that way.”

The FHFA House Price Index released Tuesday marked the fifth straight quarter that housing prices in the Bend-Redmond MSA showed double-digit percentage increases. The index tracks average price changes from repeat sales and refinancings on the same single-family properties.

Rising home values contribute to a market shift. “The purchase market has improved some, but not as much as we’d like,” Dunn said.

— Reporter: 541-617-7815, jditzler@bendbulletin.com