Mortgage originations saw a boost in June as summer turned the corner, according to new data from Mortgage Capital Trading.
MCT’s Indices Report found that lock volumes increased by 31% last month, making up for a 15% decrease in May.
“We saw originations towards the end of May slow down, so this is likely a summertime pickup in originations,” said Andrew Rhodes, Senior Director and Head of Trading at MCT. “Rates, housing supply, and affordability will continue to be the forces behind the lack of new originations.”
Year-over-year locks were down nearly 8%, however.
Rhodes noted that the Federal Reserve’s decisions will impact lock volumes going forward.
If the Fed follows through on two additional rate hikes this year, mortgage rates will continue climbing, putting pressure on originations.
Minutes from the most recent FOMC meeting revealed intense debate around the question of further tightening.
While almost all Federal Reserve officials agreed that more increases are necessary, they disagreed on the number and pace of those hikes.
“If labor markets cool off, that could give the Fed a reason not to raise rates in July,” Rhodes noted. “This would provide a nice bounce in the markets, but I’m not holding my breath.”
In remarks after the June meeting, Fed Chairman Jerome Powell said the country has “a long way to go” to the Fed’s preferred 2% inflation rate.
The 30–year fixed rate hit its highest point of the year so far last week and shows no signs of seriously moderating. But a slight decline won’t be enough to force the market back to normalcy. With many homeowners locked into sub-4% interest rates, it would take a serious decline to entice potential sellers out of their current homes.
Follow Us On Twitter:
Competition has returned full force to the housing market as demand for limited inventory sends home prices soaring. https://t.co/wYo2uLhmye
— The Mortgage Note (@TheMortgageNote) July 10, 2023
Read More Articles:
Home Prices Reverse Course As Inventory Tightens Further