Correct answer: Media effect

When mortgage rates fall to a new recent low, homeowners are more likely to notice the decline and refinance. That heightened attention to the rate move is the media effect.

• Burnout effect: relates to borrowers who have already refinanced and are less likely to refinance again.
• Threshold effect: borrowers refinance when rates fall below a personal trigger level.
• Threshold-media effect: combines both personal thresholds and attention to recent lows.

Here, the key clue is that 4% is a recent low, so the media effect is most likely to dominate.