Rising rates this month have slowed mortgage refinancing, which had surged in August.

"The boomlet's gone," said David Lereah, chief economist at the Mortgage Bankers Association. Refinancings made up as much as 34% of all home loans at some points in August, according to the trade group's survey. Last week they were down to 29%.

That's still "relatively strong," Mr. Lereah said. But the association is projecting overall lending volume this year at slightly more than $800 billion-well shy of record levels.

Refinancing has become a crucial ingredient in healthy origination years. Even when home sales set records, as they did last year, mortgage volumes don't come close to the banner years of 1992 and 1993 unless refinancings are also strong. The refinancing boom was at its peak in those years, and home loan originations reached $1 trillion in 1993.

"The demographics just won't let us get to a trillion by purchase alone," Mr. Lereah said.

Most baby boomers have bought at least their first homes. The generation that follows-the so-called baby bust-isn't large enough to generate such high mortgage volumes by itself.

Refinancing opportunities are harder to come by than in the early 1990s.

For one thing, U.S. homeowners have enjoyed several years of generally low rates. That means they've either already refinanced from the high rates of the '80s or bought homes at this decade's lower rates.

In 1997 rates have been more stable than at any time in the 1990s. That, too, crimps refinancing volume, which rises if rates fall steadily, said Keith Gumbinger, vice president at HSH Associates, a Butler, N.J., real estate information company.

In 1992 and 1993 many homeowners refinanced more than once, as rates fluctuated more. Thus a borrower might have refinanced a 30-year loan at 8.5%, only to find months later that 7.5% was available and then a rate even lower than that, Mr. Gumbinger noted.

Also, because rates were more volatile, many homeowners feared they had missed the refinancing boat when rates fluctuated up. When rates fluctuated down, homeowners jumped to secure a low rate.

If rates dropped again, they might refinance again-and boost the business some more. But most observers expect the Federal Reserve to move to raise rates slightly by the end of the year, making another surge of refinancings unlikely.

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