As home-loan refinancings last week made up the lowest percentage of total mortgage volume in at least four years, economists grew more discouraged about the prospects of a refinancing boom returning soon.

The Mortgage Bankers Association of America reported that only 11.2% of all loans last week were refinances. That's down from a high of 65.9% in early September 1993, during the height of the recent refi boom.

For the past two years refinancings have propelled the lending industry to record originations and a massive expansion.

But in February refinancing volume crashed as interest rates climbed.

Lower Rates Seen as Spur

Last week, a 30-year, fixed-rate loan's interest rate averaged 8.94% nationwide, according to HSH Associates, a Butler, N.J., research concern. In 1993, the loan's average rate dropped to as low as 7.08%.

What would it take for a refi boom to return?

Lower interest rates, answered David Lereah, the MBA's chief economist. He said refi volume "is a rate-driven phenomenon."

At Ryland Mortgage Co., for example, 15% of the loans closed in June were refis. In May, 33% were refis.

Timothy B. Hoffman, vice president, explained that loans closed in June entered the Columbia, Md., lender's pipeline in March or April, just as interest rates took their most severe jumps.

Most Loan Rates Low

Of the industry's $2.8 trillion portfolio, 71% of the loans are now at extremely low interest rates, said Mr. Lereah. "I don't think the 7% mortgage rate is right around the corner," said Joseph Hu, director of mortgage research, Oppenheimer & Co. "I won't say it will never come again, but it's going to be a long time before we see that again."

Mr. Lereah of the MBA thinks the percentage of refis from total loan volume will drop below 10% should rates continue to rise.

And rise they shall, he predicts. Only if the economy slows to a 2.5% growth rate in gross domestic product or if the bond market perceives that the Federal Reserve will not act against inflation will interest rates retreat.

When? "1995," he said.

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