Activity is now down 77% since the start of the year.
Refinance dollar volume decreased again last week as record-high mortgage rates continue to repel potential buyers from refinancing.
Fannie Mae reported a 17.7% decrease in the dollar volume of refinance applications for the week ending October 21. Compared to the same week last year, Fannie’s Refinance Application-Level Index (RALI) was down 86.6%. The RALI count posted an 18.2% week-over-week decline and was down 85.6% year over year.
“Since the beginning of August, mortgage rates have increased almost 200 basis points, driving down the share of outstanding loans with incentive to refi,” said Fannie Mae chief economist Doug Duncan. “The overall level of refinancing activity is down 57% over the past two months and down 77% since the beginning of the year.”
The refi dollar volume was 91.2% lower than during the refinance boom in the third quarter of 2020. Compared to the “refi slowdown” in the fourth quarter of 2018, refinance applications were down by 39%.
The Mortgage Bankers Association projected that economic headwinds and the housing market crunch in 2023 will drive a 3% drop in purchase originations and a 24% plunge in refinance volume.