Mortgage rates have been volatile and unpredictable to say the least. Some of this has to do with overall market volatility surrounding the market’s reaction to new realities presented by coronavirus. On a tangential note, the pandemic created a separate, bigger issue for the mortgage market with the CARES Act (which invites those in need to skip up to 360 days of mortgage payments even if they can’t document that need).
Mortgage investors are guaranteed timely repayment by mortgage servicers and housing agencies, but the volume of forbearances could mean there’s not enough cash for the normal guarantees. The result is drastically reduced demand among investors until they get a better sense of the fallout. Lower demand = higher rates, all other things being equal. Rates are only as low as they are due to extremely high prices for mortgage bonds, driven in large part by the Fed’s bond buying programs launched on March 16th.
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Source: mortgagenewsdaily.comNew feed
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