“Longer-term rates, including mortgage rates, had already baked in the expectation of hikes at this and future meetings,” said Mike Fratantoni, a senior vice president and chief economist at the Mortgage Bankers Association.
Non-agency market participants have concerns about lender’s choice, but also expect modern credit scoring models to improve visibility into borrower credit behavior.
The yield on the 10-year has increased from 4.8% at the beginning of the Trump administration to above 5.0% this week, even with recent efforts by the Treasury aimed at lowering the yield, such as bond buybacks.
Ginnie guaranteed $49.44 billion of MBS in August, a 3.0% decline from July. Refinance volume declined 13.6% during the period, while purchase-mortgage volume held steady at 0.2%.
The trade group seeks industry comment on a plan to centralize data on the loans collateralizing both agency mortgage-backed securities and non-agency MBS.
“Next week’s [Fed] meeting will be key, as the inflation and economic outlook will help shape the path of rates and homebuyer demand,” said Bob Broeksmit, president and CEO of the Mortgage Bankers Association.
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