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Financing

As Interest Rates Fall, Refinance Demand Surges in First Week of 2023

Mortgage rates fell slightly at the start of 2023, causing a slow but steady rise in refinancing applications to kick off the new year

January 11, 2023

Image: Stock.adobe.com

After rising at the close of 2022, mortgage rates fell sharply during the first week of 2023, dropping from 6.58% to 6.42%, CNBC reports. As a result, applications to refinance a home loan increased 5%, though that volume is still 86% lower than the same week one year ago.

At the current rate, 270,000 borrowers could benefit from a refinance compared with 7 million borrowers who benefited from refinancing at the 3.52% rate one year ago.

Mortgage applications to purchase a home fell 1% for the week and were 44% lower than the same week one year ago. That was the lowest reading since 2014. Buyers today are not only contending with higher interest rates but falling supply. They are also seeing prices come down and may be waiting to see how low they go.

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