Federal Reserve Rate Hikes Slow Mortgage Growth, Impacting Originators
What happened
The Federal Reserve's move to raise its benchmark rate has slowed 10-year Treasury bond yields, which is expected to slow mortgage rate growth. However, loan volume is currently low compared to 2020 and 2021, as a wave of refinances is not anticipated in the immediate future. The Federal Reserve may take further action if energy inflation does not subside.
From mpamag.com
Why it matters
The current rate environment and low refinance volume are challenging the mortgage origination market. Tony Kottenbrock, SVP and head of wholesale at Newrez, advised that loan officers must broaden their referral bases, including financial planners and attorneys, to build new relationships and maintain business.
From mpamag.com
Who's involved
- FEDThe central bank that sets the benchmark rate and influences market conditions.
- NewrezA loan originator whose operations are affected by Federal Reserve actions.
- Jerome PowellThe formal Chair and leader of the Federal Reserve.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- NewrezSpeculative
Newrez might face restricted loan volume due to the current rate environment, requiring strategic shifts in origination.
- LendingTreeSpeculative
LendingTree might see restricted loan volume and increased consumer borrowing costs due to the rate environment.