Applications remain less than a third of the market
The dollar volume of refinance applications plunged 29.7% for the week ending Dec. 30, according to Fannie Mae’s Refinance Application-Level Index (RALI).
On a year-over-year basis, refinance dollar volume was down by 86.2%. Its four-year average fell by 12.6% during the period.
“Refinance applications decreased almost 30% as a result of the Christmas holiday-shortened week,” said Fannie Mae chief economist Doug Duncan. “With mortgage rates having moved sharply higher over the year, refinance activity ended 2022 down 86% compared with the end of the prior year.”
RALI count decreased 27.2% week over week and was 85% compared to the same week ago.
“Refinance applications remain less than a third of the market and are 87% lower than a year ago as rates remained close to double what they were in 2021,” said Joel Kan, deputy chief economist of the Mortgage Bankers Association. “Mortgage rates are lower than October 2022 highs but would have to decline substantially to generate additional refinance activity.”
“The housing market remains in the doldrums with declining sales, inventory and prices,” added Sam Khater, chief economist of Freddie Mac. “The declines in sales and deceleration in home prices began swiftly earlier in 2022 but have moderated more recently. While the intensity of weakness is moderating, the market continues to decline and forward leading indicators suggest housing will remain weak throughout the winter.”
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