Correct answer: Threshold effect

If mortgage rates are at 4% but 4% is no longer a new recent low, the media effect is weaker because borrowers are not being prompted by a fresh rate breakthrough.

In that case, refinancing behavior is more likely driven by borrowers' individual refinancing thresholds.

• Threshold effect: refinancing occurs when rates fall below a borrower-specific cutoff.
• Media effect: tied to a new low or a noticeable change in rates.
• Burnout effect: concerns reduced refinancing among borrowers who have already refinanced.

Because the rate level is not a fresh trigger, the threshold effect is the best choice.