Refinancing activity fell last week in response to higher mortgage rates. The Mortgage Bankers Association said the average contract rate for 30-year fixed rate mortgages jumped 32 basis points to 5.57%. In response, the Refinance Index declined 11.8% to 2605.7, while the refinancing share dropped to 59.4% of total applications from 62.4%. This is the lowest level for both since the latter part of November.

The decline in refinancing activity in the past several weeks has downgraded prepayment outlooks with speeds projected to drop around 10% in July (reported in August) for FNMAs and nearly 30% in August.

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