Mortgage refinance demand has plunged 43% from the same period last year, having declined 5% last week from the previous week. According to CNBC, the recent sharp rise in interest rates is responsible for the depressed demand in the mortgage refinance as the number of borrowers shrink.
The recent decline in the mortgage refinance demand is the first year-over-year drop since March 8, 2019
Mortgage refinance demand spiked last year as rates fell dramatically due to fears of the coronavirus that hit financial markets.
The refinance share of mortgage activity fell to 64.5% of total applications from 67.5% the previous week.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $548,250 or less increased to 3.26% from 3.23%.
Mortgage applications to purchase a home, which is less sensitive to weekly rate moves, rose 7% for the week and were 2% higher than the same week a year ago.
Rates are not up 40 basis points since the start of the year.
Economic growth prospects, improving job market, and increased vaccine distribution push the mortgage refinance rates higher.
Investors keep an eye on the 10-year Treasury as mortgage rates loosely follow the yield on the bond.
