Mortgage Refinancing Applications Plummet as Interest Rates Rise

Spike in Rates Keeps Homeowners from Refinancing Loans

30-Year Fixed Refinance Rate Stands at 7.46%

Mortgage refinancing applications have witnessed a significant decline, dropping by a substantial 41% compared to last year's figures. This sharp downturn is attributed to the recent increase in interest rates, which has deterred homeowners from pursuing refinancing options. The average 30-year fixed refinance rate has reached 7.46%, a notable increase compared to previous levels.

The jump in rates has affected different mortgage types. While 30-year fixed rates have increased, 30-year jumbo fixed rates have also seen an upward trend. However, 15-year fixed rates have experienced a slight dip recently.

The 15-year fixed rate has retreated from its peak earlier in the year, which was around 7.22%. As of July 30, 2024, the FHA 30-year fixed refinance rate stands at 6.42%, and the jumbo 30-year fixed rate is at 7.46%.

The rise in interest rates, influenced by 13 cash rate increases since May 2022, has made it more challenging for borrowers to secure favorable refinancing terms. Consequently, many homeowners are hesitant to pursue refinancing, leading to a decrease in applications.