As mortgage and refinance rates continue to climb—most popular options surpassing 4 percent—interest is heading in the opposite direction.
According to the Mortgage Bankers Association, mortgage applications dropped 13.1 percent last week to the lowest level since December 2019. Refinance applications decreased 15 percent, a 56 percent decrease year-over-year.
“Higher mortgage rates have quickly shut off refinances, with activity down in six of the first seven weeks of 2022,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Conventional refinances in particular saw a 17 percent decrease last week. Purchase applications, already constrained by elevated sales prices and tight inventory, have also been impacted by these higher rates and declined for the third straight week.”
Requests to refinance accounted for just 50.1 percent of all mortgage applications, compared to 68.5 percent one year ago.