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This is Part I of a deep dive into the home appraisal industry. Today we explore the origins of the appraisal industry and its current lack of diversity.

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Mortgage

Mortgage rates hold steady at 2.77%

Political and economic factors will likely keep rates fluctuating

The average mortgage rate for a 30-year fixed loan fell two basis points last week to 2.77%, according to Freddie Mac’s Primary Mortgage Market Survey. Now 12 basis points above the record low set Jan. 7, rates more closely resemble those seen over two months ago.

The 15-year fixed mortgage rate also shifted downward to 2.21 from 2.23 the week prior.

With last week’s data in, mortgage rates have now managed to hover below 3% for nearly six months and have fueled purchase and refinance activity to record-setting levels amid a global health crisis.

But political and economic factors are causing some fluctuation in those rates, putting upward pressure on Treasury yields, said Sam Khater, Freddie Mac’s chief economist.

“However, we forecast rates to remain relatively low this year as the Federal Reserve keeps interest rates anchored near zero for a longer period of time, if needed until the economy rebounds,” Khater said.


Leveraging eClosings to effectively manage increased loan volumes

With no end in sight to record low rates and the increased loan volume, lenders must streamline workflows and accelerate time to close. Evolving from traditional closings to hybrid closings to full eClosings can help lenders process more loans at a faster pace without overwhelming their resources.

Presented by: SimpleNexus

Freddie Mac’s quarterly forecast estimates that the average 30-year fixed-rate mortgage will be 2.9% in 2021 and 3.2% in 2022. However, some economists believe a slow upward path for rates is inevitable in 2021.

Despite the Fed’s vow to keep interest rates low until 2022, Mike Fratantoni, chief economist at the Mortgage Bankers Association, said recent Fed speeches revealed they are less committed to asset purchases, and wouldn’t be surprised if said purchases were reduced by the end of year.

“While for some time people thought that mortgage rates might be less impacted than Treasury rates, the spread between mortgage rates and Treasury rates has narrowed substantially. Going forward, any increases in Treasury rates are really going to be matched by increases in mortgage rates,” Fratantoni said.

The Treasury is now expected to auction close to $3 trillion worth of bonds this year, and with that amount of supply hitting the market, a historically inverse relationship will see bond prices dropping and yields on the rise.

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