Mortgage rates began their rise after President-elect Donald Trump won the election, and have not stopped rising since.

Now, lenders are reporting much lower expectations when it comes to near-term mortgage demand, according to Fannie Mae’s fourth quarter 2016 Mortgage Lender Sentiment Survey.

The survey, which was conducted after the election, shows that the net share of lenders expecting an increase in purchase mortgage demand over the next three months hit near all-time lows. The majority of lenders reported “mortgage rates are not favorable,” which was cited by a survey high of two-thirds of lenders.

Demand expectations for the next three months were at or near survey lows across the different loan types, including GSE eligible, non-GSE eligible and government.

Refinance mortgage demand fared even worse as it dropped to a new survey low across all loan types. These new lows are coming in after three straight quarters of positive profit margin outlook.

“The survey captured lenders’ bearish sentiment driven by the recent surge in mortgage rates – a level of bearishness last seen in the summer of 2013 during the taper tantrum,” said Doug Duncan, Fannie Mae senior vice president and chief economist. “The sudden surge in mortgage rates weighed on expected future purchase and refinance volume.”

“Downbeat production expectations suppressed lenders’ profit margin outlook to the worst showing in the survey’s short history,” Duncan said. “Rates could slowly unwind in coming quarters, reversing some of the decline in expected volume.”

“However, the potential normalization of interest rates after a sustained period of strong refinancing volumes presents the biggest business challenge facing mortgage lenders in some time,” he said.

All signs point toward a continued increase in mortgage rates. Wednesday, the Federal Reserve raised its benchmark interest rate by 25 basis points, and could raise rates three more times next year.

This chart shows that lenders are now much less concerned with compliance issues, and much more concerned with current market trends, such as rising interest rates.

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(Source: Fannie Mae)