September 15, 2023: Mortgage refinance demand dropped 0.8% as interest prices increased.

The Dow Jones Industrial Average gained 51 points, or 0.2%. The S&P 500 rose 0.3%, and the Nasdaq Composite gained 0.6%.

Demand for refinances dropped 5% for the week and was 31% lower than the same week before a year. The refinance share of mortgage activity came down to 29.1% of total applications from 30.0% the previous week. As a comparison, when the pandemic monetary policy had interest rates around 3%, the refinance share of mortgage applications was 63%.

Applications for mortgages to purchase a home grew 1% weekly but were 27% lower than the same week one year ago. The adjustable-rate mortgage share of total applications rose, signaling that potential buyers are using all the tools they can to lower their monthly payments. ARMs offer lower interest rates but are deemed riskier because their rates are fixed for a shorter term.

“Mortgage applications decreased for the seventh time in eight weeks, reaching the lowest level since 1996,” said Joel Kan, a Mortgage Bankers Association economist, in a release. “Given how high rates are right now, there continues to be minimal refinance activity and a reduced incentive for homeowners to market and buy a new home at a higher rate.”

Mortgage rates stayed high to start for the week, according to a different survey from Mortgage News Daily, but that could change following the release of the monthly Consumer Price Index on Wednesday.

“While it’s always likely that big-ticket data will thread the needle and result in minimal movement, there’s little question that any big departure from expectations will rock the bond boat for better or worse,” wrote Matthew Graham, chief operating officer.