Delayed QE Tapering Expected to Increase Mortgage Lending
Mortgage lending likely will experience an upward swing in volume with the Federal Reserve’s Sept. 18 announcement that it will continue quantitative easing in the near-term, HousingWire reported.
In the last few months, mortgage rates have trended upward with concerns that the Fed intended to wind down its monthly $85 billion in bond buying.
Rui Pereira, managing director at Fitch Ratings, told HousingWire that the Fed’s surprise announcement should reverse the upward trend in mortgage rates and “give a short-term boost to mortgage volume as borrowers look to take advantage of the temporary reprieve.”
Pereira told HousingWire that rising mortgage and interest rates and lower stock markets were the reasons the Fed cited for continuing its bond-buying program.
Tim Rood, partner and managing director of The Collingwood Group, told HousingWire, “Lower interest rates undeniably boost buyer interest and affordability. You can rarely pick the bottom of a housing market, but locking in 3-4 percent mortgages for 30 years is a once-in-a-lifetime phenomenon.”