Mortgage Rates Increase Ahead of FHFA Price Adjustment
Mortgage rates increased over the last seven days, their movements once again dictated by developments on the FHFA’s price adjustment on mortgage refinances.
There were a number of important economic data releases and events over the last week – including the Federal Reserve’s September meeting, something that often moves markets – but as has been the case for the better part of a month now, the factor that had the largest impact on mortgage rates this week was the FHFA’s 0.5 percent price adjustment on mortgage refinances. The controversial program doesn’t officially go into effect until December 1st, but it appears that the price increase is already appearing as part of many lenders’ quoted rates. A recent wave of borrower demand has extended the turnaround time on loans for many lenders, leading some to apply the price adjustment sooner than they may have previously anticipated. The FHFA director’s defense of the program to Congress on Tuesday likely contributed to a sharp uptick in mortgage rates as well.
Unless there is an unforeseen alteration or further delay of the program, it’s unlikely that mortgage rates will revert to the long-term low levels anytime soon.
