Higher interest rates and a surge in federal regulations will throw a bucket of cold water on the refi market in 2014, driving down refi activity by 70%. Home sales are expected to rise somewhat, but overall lending activity will decline by 30%, according to the MBA forecast.
Interest rates, which jumped from record low of around 3%, have already risen to 4.5% this year, and are expected to rise even more next year--to 5.5% or more.