Refinancing activity was sharply down this week, after the steady rise of the 30 year fixed rate mortgage. Mortgage rates now stand higher than they were in December of 2007, prior to the 2 big Fed rate cuts.
Inflation concerns are what have kept rates at this level. Despite the efforts by the Fed to soften the credit crunch, credit continues to get more expensive and more difficult to obtain. Interest rates shoot as a result of hight inflation, and can drop at times of low inflation.