In Q3 2020 mortgage lenders had a per-loan expense of $7,452. This is up from $7,217 in the same quarter of 2019. Costs rose in the third quarter of 2020 over a cost of $6,566 in the second quarter of 2020 due to increased spending on hiring personnel to service unusually high demand caused by record low mortgage rates.
On the FHFA allowed the GSEs Fannie Mae and Freddie Mac to pass on a 50 basis point adverse market conditions fee for most mortgage refinances with a balance above $125,000. This fee was implemented to help protect the GSEs from an estimated $6 billion in COVID-19 related losses.
How Mortgage Rate Predictions Work
Almost nobody knows where mortgage rates will go in the future as the economy is inherently unpredictible. Black swans like the COVID-19 crisis are not easy to predict, though even more normal market conditions can be hard to predict. Many predictions are nothing more than a linear projection of the recent past onto the future.
The Federal Reserve raised rates 4 times in 2018 at their meetings in Federal Reserve Chairman Jerome Powell stated the central bank was “a long way” from neutral, hinting many more rate hikes would be coming. Continue reading “2021 2022 Mortgage Rate Housing Market Predictions”