Refinance dollar volume holds steady amid rising rate environment

Fannie Mae reveals latest data

Refinance dollar volume holds steady amid rising rate environment

Refinance dollar volume has remained virtually unchanged in the past several weeks, according to a new report from Fannie Mae.

Fannie’s Refinance Application-Level Index (RALI), a weekly series tracking refinance activity and historical trends, found little change in the average RALI dollar volume for the last four weeks, up 2% for the week ending August 19.

Week over week, the dollar volume of refinance applications decreased 1.3% and was 75.7% below last year’s levels. The RALI count posted a 1.2% week-over-week drop and is down 74.6% compared to the same week in 2021.

Fannie Mae chief economist Doug Duncan commented: “Refinance application activity decreased slightly last week and has not changed meaningfully in the past four weeks. Compared to its level a year ago, refi activity is down by approximately 75%, reflecting the higher mortgage rate environment.”

Overall mortgage applications continued to be held down by declining homebuyer demand, as rising rates, challenging affordability, and a gloomier economic outlook kept buyers on the sidelines.

Read more: Mortgage applications hit 22-year low, lending activity suffers

Compared to the third quarter of 2020, when refinance lending was at its peak, the RALI dollar volume was down 80.8%. However, the refi dollar volume was 32.6% above the “refinance slowdown” levels in Q4 2018.