(Bloomberg) -- The double-digit decline in U.S. mortgage refinance applications reported by the Mortgage Bankers Association is due mostly to inclement weather and the President's Day holiday, according to Scott Buchta, head of fixed-income strategy at Brean Capital.
Refinance applications fell 11.4% for the week ending Feb. 19. The index has declined five out of seven weeks this year, and is at its lowest level since Dec. 25.
While the most recent decline was driven more by the three-day weekend and the one-time weather event, expect to see the index continue its descent as mortgage rates are now back above 3.00%, Buchta wrote.
About 60% of all conventional borrowers still have incentive to refinance their mortgages -- meaning they can lower their current rate by at least 0.50% -- compared to about 80% when lending rates were around 2.75%.
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