The estimate is based on rate changes since 2000 and should be interpreted as “directional rather than structural,” the analysts wrote in a report released Friday.
Refis, which accounted for roughly 28% of overall mortgage activity in 2025, were already expected to grow in 2026. Fannie Mae forecasts mortgage rates to fall about 30 basis points this year, driving refinancing volume up 64% to approximately $882 billion.
A faster decline in rates, however, would pull some of that activity forward into the near term, the analysts said.
“I expect to see a noticeable increase in refinance applications next week,” Brendan McKay, broker and owner of Maryland-based McKay Mortgage, told HousingWire. “While the rate drop was modest, the catalyst for the drop will generate headlines and borrowers will see that rates have fallen. This will lead to more incoming refinance inquiries and greater receptiveness to proactive outreach.”
Robert Pieklo, president and CEO of eLend, which works in the wholesale mortgage space, echoed the optimism.
Pieklo said that refi business accounted for 22% of eLend’s origination volume in December, when locks were “light.” January started stronger, mainly due to Trump’s recent announcements. But Pieklo said his company has seen purchase-heavy business, with no significant uptick in refi activity just yet.
“We do expect (rates) to climb next week once this news cycle hits and brokers take in applications,” Pieklo said. “For reference, we were about 22% refi last month; should see that tick up to 30% if rates hold.”
Depac Parthi, branch manager at CMG Home Loans’ Shining Star Funding branch, said borrowers generally fall into three categories.
First are homeowners with very low mortgage rates — around 3% — who have little incentive to refinance. A much larger group holds mortgages near 6.5% and is “trickling in at a slow pace.” The third group includes borrowers with rates above 6.75%, who are “getting their act together” and actively considering refinancing.
Loan officers are reaching out to these higher-rate borrowers, Parthi noted, but they represent the smallest segment of the market.
“In a nutshell, refinancing will continue at a slow and steady pace if rates remain the same,” Parthi said. “If rates drop another 0.25%, we will see some anxiety and hurry on the borrowers’ part.”
