Higher rates have hit the mortgage refinance business particularly hard. Applications to refinance a home loan fell 22 percent, seasonally adjusted, during the two-week period. They dropped by more than half in the last four weeks and ended the year 13 percent lower compared to a year ago. Mortgage rates rose sharply following the presidential election of Donald Trump and have hovered near two-year highs ever since.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.39 percent from 4.45 percent, with points increasing to 0.43 from 0.39 (including the origination fee) for 80 percent loan-to-value ratio loans.

Mortgage applications to purchase a home have also taken a hit from higher rates, though less severely. They fell 2 percent during the two-week period and ended the year 1 percent lower on the year.

“The composition of application activity continued to shift away from refinance towards purchase,” Fratantoni said. The refinance share of applications was around 52 percent over the last two weeks, the lowest level since July 2015.”

While the cost of financing a home has gone up in the past six weeks, the cost of the home itself has been increasing as well. Home prices in November were 7.1 percent higher than in November 2015, according to CoreLogic. The gains keep growing, crossing the 7 percent line for the first time in over 2½ years.