Refinancing activity has seen a surge recently as borrowers respond to changing market conditions. According to a recent report from Fannie Mae, for the week ending Aug. 9, 2024, the dollar volume of refinance applications jumped by 32.8% compared with the previous week. When looking at the refinancing activity on a year-over-year-basis, the total dollar volume rose by 94.4%. The number of applications also increased by 58.2% year-over-year and by 22.8% week-over-week. Mark Palim, Fannie Mae's deputy chief economist, has been monitoring these trends.
"With mortgage rates on the decline, refinance activity increased by over 32% last week, as measured by our Refinance Application-Level Index, after rising by 21% in the prior week. In fact, last week, total refinance activity hit a level not seen since August 2022, when mortgage rates were closer to 5%. Our data show that as of the end of June approximately 88% of Fannie Mae single-family mortgage borrowers had a note rate less than 6%, and approximately 81% had a rate below 5%. This indicates to us that, while refi activity is up significantly over the last couple weeks, most borrowers would need mortgage rates to move much lower before they’re incentivized to refinance."
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