Following rise in rates, refinance activity slows, at least for now
The refinance share of mortgage activity is at its lowest level in almost two years, according to the Mortgage Bankers Association’s weekly data released on Jan. 27. But the cash-out refinance market, which may be less sensitive to rising interest rates, may keep refinance activity alive this year.
“We have reason to believe refis are not going to fall off the face of the earth,” says Hamilton Fout, Fannie Mae’s director of economics, even with rising interest rates.
Refinance activity was 49.4 percent of total mortgage applications for the week ending Jan. 20, according to MBA, down from 50.0 percent the previous week. The percentage that week was the lowest since July 2015. MBA’s survey for this data covers more than 75 percent of all U.S. retail residential mortgage applications.