The Russian invasion of Ukraine has stopped mortgage rates' upward swing, but probably not for long.
Freddie Mac said today that the "cascading effects" of the war in Ukraine have created uncertainty. Usually, geopolitical turmoil causes mortgage rates to go down, as investors seek safe havens.
But economists at the government-sponsored enterprise expect rates to increase in the coming months. That echoes other economic forecasters, who said that the war in Ukraine will be inflationary. Fed Chair Pro Tempore Jerome Powell, speaking yesterday before Congress, agreed.
"The economic effects are highly uncertain," said Powell. "We have seen energy prices move up further, and those increases will move through the economy, push up inflation and weigh on spending."
Some mortgage lenders are also preparing for some turbulence. Rocket, in its annual financial report, wrote that the war in Ukraine "... could cause consumer confidence and spending to decrease."
Rocket also wrote that the resulting economic fallout could "adversely affect the credit quality of some of our loans and investments and the properties underlying our interests."
At least in the short-term, rates are down. But it's unclear if the war in Ukraine will lower them enough to bring back any refi business. Are you taking any steps to adjust your strategy in light of potential mortgage rate jitters?
Georgia Kromrei
Senior Mortgage Reporter, HousingWire
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