Refinance dollar volume rebounds as mortgage rates retreat

“Mortgage rates have inched downward since the second half of June, though they remain significantly higher than they were at the start of the year,” Fannie Mae chief economist Doug Duncan said. “As a result, while refinance activity increased at its highest weekly rate so far this year (excluding holiday-impacted weeks), the overall level remains significantly lower than 2020 and 2021 levels.”

The 30-year fixed-rate mortgage averaged 5.30% on July 28, down from the previous week when it was 5.54%, Freddie Mac reported.

“It’s clear that over the past two years, the combination of the pandemic, record low mortgage rates, and the opportunity to work remotely spurred greater demand,” said Sam Khater, chief economist of Freddie Mac. “Now, as the market adjusts to a higher rate environment, we are seeing a period of deflated sales activity until the market normalizes.”