The potential refinance market has taken a heavy blow with loan candidates dropping by 40%. The rise in mortgage rates, heightened prices and tight housing market are all contributors to the dip.
"In just the first six weeks of the year, about 1.4 million borrowers lost the interest rate incentive to refinance," according to National Mortgage News.
"There are still 2.65 million potential refi customers likely to qualify and benefit from a loan refinance at current rates, but this is the smallest this population has been since 2008, prior to the initial rate decline during the recession."
In addition to the refinance market hit, refinance originations also fell 29% according to the report. The median home price has also been affected by the mortgage rate spike with a 6% increase.
"To purchase a current median home, it requires 23% of a homebuyer's median monthly income, the highest this share has been since 2009," according to NMN.
"Affordability declines from rising rates could continue putting more pressure on lower-income buyers, who may face increased competition for lower-priced homes."
To learn more about how the mortgage rate spikes are impacting refinance mortgages and the mortgage market in its entirety, click on the image above.