Mortgage Rates Continue Downward Trajectory After FHFA Price Adjustment Delay

Mortgage rates fell again this week, trending back down to their lowest levels.

Following last week’s announcement by the FHFA that they were going to delay the rollout of their 0.5% price adjustment  placed on mortgage refinances – news that sent mortgage rates down sharply. Rates continued their downward trajectory, albeit at steadier pace, and returned to levels last seen back in early August. The Federal Reserve’s continuing rate of buying mortgage bond purchases have kept downward pressure on rates and ensured that markets continue to function as intended.

That said, despite the return to record lows, two things are important to keep in mind regarding the path forward for mortgage rates. First, these record low rates only apply to the most creditworthy borrowers with straightforward loans – people with weaker credit or seeking less typical loan types are being quoted much higher rates. Second, the rollout of said FHFA program was only delayed, not cancelled, meaning that mortgage rates could begin to see modest increases once lenders begin to reapply the price adjustment. For now, mortgage rates are enjoying another strong stretch back to long-term lows.

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