Mortgage refinance demand plunges 19% after interest rates shoot higher

Mortgage rates rose sharply last week as the war with Iran increased inflation fears, triggering a major drop in refinance demand while buyer (purchase) demand improved. The move is a near-term headwind for refinancing volumes and mortgage-originator revenue, and is likely to keep mortgage-sensitive sectors under pressure until rates stabilize.

Analysis

Mortgage rates rose sharply last week as the war with Iran increased inflation fears, triggering a major drop in refinance demand while buyer (purchase) demand improved. The move is a near-term headwind for refinancing volumes and mortgage-originator revenue, and is likely to keep mortgage-sensitive sectors under pressure until rates stabilize.