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Mortgage rates storm – how to weather it


That’s where that calm-and-steady approach comes in, yielding a model of calmness amid the meltdown: “The summer buying season may have provided a nice backstop to prevent lock volume from dropping further this month,” Rhodes noted. And yet Rhodes is a realist in terms of the post-summer landscape: “If we continue into this restrictive territory through the winter buying season, we could see additional contraction through the rest of 2023.”

Touting its innovation for the mortgage secondary market, the company serves the breadth of the industry, from investors to lenders. In its corporate literature, the company boasts of its technology and know-how in assessing how mortgage assets are priced, locked, protected, valued and exchanged “…offering clients the tools to thrive under any market condition.”

Nobody got the memo on higher rates

Still, nobody could have predicted the aggressive action taken by the Fed in raising the federal funds rate, which has contributed to a one-year high for mortgage rates. With nonfarm payroll jobs growing slightly higher than expected and the unemployment rate ticking up from 3.5% to 3.8%, the Fed may reload its economic ammunition to fire up more rate hikes in what’s left of this year, Rhodes said.

Those hoping for a Christmas miracle in terms of a rates reversal should instead brace themselves for a winter of discontent: “We’re going to move sideways if not slightly contact a little bit in originations for the rest of the year,” Rhodes said. “I was looking at the Fannie Mae projections, and they’re showing a slight decrease in originations as well throughout the end of the year – in Q3, $429 billion and Q4 $410 billion.”

To reiterate, no sudden turnaround should be anticipated for the remainder of this year: “Depending on what happens in the economy, I think we’re going to continue to see a slight contraction in overall originations going into the winter months,” Rhodes said. “Like the Fed keeps saying ‘it’s all data dependent.’ If something happens in the economy and rates start dropping off, then you’ll see a pickup in originations, but I don’t foresee that happening. Throughout the rest of this year, we’re definitely going to see sideways and likely more contraction.”



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