Climbing interest rates have cut demand for refinancing by more than half in just a few months, essentially ending a refinancing boom and drying up demand for mortgage lenders.
have cut demand for refinancing by more than half in just a few months, essentially ending a refinancing boom and drying up demand for mortgage lenders.
The low demand for refinancing has put lenders at a low point in what’s usually a cyclical industry. This has, in turn, led to suddenly overstaffed mortgage lenders“A lot of companies have sort of staffed up and increased their capacity to handle this refinance business, and now you’re seeing things turn on a dime,” said Joel Kan, vice president of economic and industry forecast for the Mortgage Bankers Association.
Total mortgage applications were up 63% in 2020 and up 50% in 2021, compared to 2019. So far in 2022, they’ve been down less than 1% compared to the average demand in 2019. These past two years aren’t even record highs. In 2012, 78% of mortgage applications were for refinancing. From 2009 to 2011, the share was 70%. The data provided toKan said refinance demand is likely near the bottom. The MBA’s forecast doesn’t expect mortgage rates to get too much higher than they are now.
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