US refinance demand falls to half of year-ago levels as mortgage rates climb again

Demand for mortgage refinancing in the United States has fallen to roughly half of what it was a year ago, as mortgage rates climb back toward levels not seen in nearly three years, according to a CNBC report.

The rise in rates has also weighed on demand for new home purchases, with both refinancing and homebuying activity continuing to decline as borrowing costs increase. Higher rates make monthly payments more expensive for prospective buyers and reduce the financial benefit for existing homeowners of refinancing an existing mortgage.

The pullback in refinance demand reflects a broader pattern seen throughout the current higher-rate environment, in which homeowners who locked in lower rates in previous years have little incentive to refinance into today's higher rates.

Homebuying demand has similarly softened as affordability pressures persist, with elevated mortgage rates compounding already high home prices in many US markets.

It remains unclear how long rates will stay elevated, as mortgage pricing continues to respond to broader shifts in the bond market and expectations around monetary policy.