The great American refinancing boom of 2015 is turning out to be greatly exaggerated.

In January, concern mounted among U.S. mortgage-bond holders that homeowner refinancing was about to soar, decreasing the value of their securities. Their worries were short-lived. Last month, premiums fell on bonds backed by loans unlikely to refinance. That means investors saw less need for protection against the risk borrowers would repay their mortgages early.

The drop in interest rates that helped fuel a January surge in refinancing applications has reversed, with the cost of a 30-year mortgage rising 6 percent over the past three weeks from a 20-month low. That sparked higher demand in the $5.6 trillion market for government-backed mortgage bonds, and refinancing levels are expected to stay low for the foreseeable future.

When rates rise, “the prepayment concern is not all that relevant,” said David Land, a bond manager at St. Paul, Minnesota-based Advantus Capital Management, which oversees about $33 billion.

While the bond market celebrates, it’s bad news for lenders, homeowners and companies hoping for an economic boost from consumers with more cash to spend each month.

Total mortgage production, for purchases and refinancing, will probably total about $1.2 trillion this year, and the same in 2016, Kevin Watters, head of JPMorgan Chase & Co.’s mortgage unit, said last week during the bank’s investor day.

Last year, mortgage originations tumbled 34 percent to a 13-year low of $1.24 trillion, with refinancings accounting for 42 percent of the total, down from 64 percent in 2013, according to newsletter Inside Mortgage Finance.

With the flurry of activity at the start of this year now passed, lenders will have to focus more on loans for purchase. Refinancing applications, which had soared 84 percent in the final three weeks of January from their 2014 average, according to Mortgage Bankers Association data, have subsequently fallen 30 percent.

“The refinance business will shrink and the purchase market really needs to come back strong in order for us to reach the $1.2 trillion level and stay there,” Watters said.

Average rates on typical new 30-year mortgages rose to 3.8 percent last week, after falling from as high as 4.23 percent in September to 3.59 percent in the period ended Feb. 5, according to Freddie Mac. Economists surveyed by Bloomberg expect benchmark bond yields that drive borrowing costs to increase further as the year progresses.

“The difference between a 3.75 percent and 4 percent rate is the equivalent of feast and famine for the refinancing market,” Scott Buchta, the head of fixed-income strategy at Brean Capital, wrote in a note to clients.

Rising rates also may offset the impact of lower fees charged by the Federal Housing Administration, according to an online tool created by the Urban Institute. President Barack Obama touted that step in his State of the Union address.

At mortgage rates of 4 percent, probably 1.4 million FHA borrowers could benefit from new loans after the fee change, compared with 2.4 million at 3.66 percent, the tool shows.

Comments by Federal Housing Finance Agency Director Melvin Watt on Feb. 4 that he has no plans to expand the terms of the Home Affordable Refinancing Program also gave a boost to the market. HARP, which expires at the end of this year, allows borrowers with loans backed by Fannie Mae and Freddie Mac to get streamlined refinancing even if their homes have lost value.

Government-backed mortgage bonds are sensitive to swings in how fast homeowners refinance or move before their loans’ terms are over. That can cause debt trading for more than face value to pay off more quickly at par, and curb interest payments.

Refinancing concerns in January fueled the worst returns on the securities relative to Treasuries since 2008, an underperformance of almost 1 percentage point, according to Bank of America Merrill Lynch index data. The debt outperformed by more than 0.5 percentage point last month.

“This market has had an amazing track record of being bailed out by the rates market,” said Nikolay Stoytchev, a managing director at hedge-fund firm Ellington Management Group, referring in particular to more complex notes known as interest- only tranches, or IOs, that concentrate prepayment risk.

Still, January offered a glimpse at “the underlying fragility” of the investment strategies of some other funds betting on limited refinancing, he said. While Fannie Mae and Freddie Mac IOs values recovered most of their losses, Ginnie Mae IOs with exposure to FHA loans remain weaker, he said.

Ellington managers are focusing mostly on IOs tied to borrowers with strong credit and home equity who can easily refinance if rates drop, because they know what to expect, Stoytchev said. The firm is avoiding securities in which prepayments could be boosted by policy changes, higher property prices or looser credit, seeing those possibilities as underappreciated, he said.

Mortgages with small balances are used by investors as prepayment protection because the absolute size of homeowners’ monthly savings from refinancing are smaller, while the upfront costs they face are similar to bigger loans.

In January, premiums on bonds backed by specific loans such as those of less than $85,000, known as specified pools, reached the highest since before the Federal Reserve sent rates soaring in 2013 by signaling it would reduce its debt buying, Annaly Capital Management Inc.’s David Finkelstein said last week on a conference call.

That was rich enough to cause the firm — the largest real- estate investment trust that buys mortgage debt — to reduce holdings by almost 20 percent and replace them with generic bonds, said Finkelstein, the REIT’s agency-mortgage head. Premiums for some bonds over generic debt fell to 1.6 cent on the dollar Friday, after more than doubling in January to 2.5 cents, according to data compiled by Bloomberg.

While such protection may be less desired now and FHA refinancing may fall short of expectations, things are at least looking better for lenders than last year, said Matt Hackett, operations manager at mortgage firm Equity Now Inc.

“The applications have been volatile with the rates being volatile, but the rates are still at a low enough point that we’re getting good application volumes,” he said.

Land, the Advantus bond manager, said he never put high odds on a full-blown refinancing boom. Many homeowners already got a chance to replace their loans at lower rates, fewer brokers are soliciting borrowers than before the financial crisis and consumers face a more onerous and time-consuming process, he said.

Across the mortgage-bond market, “the concern should indeed fade over time as you see the refinance applications numbers never get to where they were” during previous refinancing waves, he said.