by Calculated Risk on 10/11/2021 12:01:00 PM
Today, in the Newsletter: Mortgage Rates Highest in 6 Months
The general rule of thumb is refinance activity will be strong if current mortgage rates are 50bps lower than the maximum of the previous year (this is just a general rule – but it works pretty well).
The following graph shows the MBA Refinance Index (Blue) and the change in mortgage rates (Red). The change is calculated as Maximum in Previous Year minus the current rate). When the red line is above 0.5% (more than 50bps decline in mortgage rates), then refinance activity generally picks up.