Refinancing Fades as Home Equity Surges

Late-Q3 mortgage rates moved near 7% after a quarter-point central bank hike to ~4%, making refinances tougher for homeowners who locked lower first mortgages earlier.
Application activity reflected that shift: refinance requests ↓~9% in the prior week, purchase requests ↓~1%, total demand ↓~4%, and refis were ~39% of applications.
Over the 3 mo through Mid-Q3 2026, one inquiry index showed refis at ~2%, down from ~39% yearly, while home-equity products reached ~76%.
Equity demand kept building: Mid-Q3 inquiry volume ran ↑~11% MoM and >150% yearly, while 30-yr lender gaps exceeded 1 point, or ~$333 monthly on $400K.
Late-Q3 also brought softer builder sentiment, with the index at its lowest since 2025, while the 10-yr Treasury topped ~5%, keeping mortgage swings in focus.