Has the roughly 25 bps rise in mortgage rates over the last month dissuaded your clients from purchasing a new home?
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Hello, LOs!
The most popular phrase in the mortgage industry right now seems to be "purchase market." The housing industry economists have pretty much all forecast an explosion in purchase volume in 2022 – the MBA is forecasting a record $1.725 trillion generated from roughly 6.4 million home sales. That's even with mortgage rates projected to climb to 4% by the end of 2022.
The economists theorize that the supply chain issues won't be as bad in 2022, homebuilders will increase their inventory, and existing homeowners will be more likely to cash in on the rise in home prices (and I guess live year-round on cruise ships?).
Less has been said about how the rise in mortgage rates will affect the purchase market. CNBC recently published a story that concluded a rise in mortgage rates was responsible for fewer pending sales in September. Hmm... I'd argue that ballooning home prices are a much bigger factor, and few would-be borrowers decide not to buy because rates went up from 3.0% to 3.25%.
But y'all are the experts – so I'd like to hear from the LOs. Has the roughly 25 bps rise in mortgage rates over the last month dissuaded your clients from purchasing a new home? How rate sensitive are they? And what are you personally forecasting over the next year? Email me anonymously at jkleimann@housingwire.com.
With permanent RON legislation being enacted across the US, lenders and title companies are leveraging eClosing to process purchases and refinances in record times. See how you can deliver that digital experience your borrowers are asking for. Watch demo.
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