Mortgage Rates Keep Pushing Higher

Mortgage rates were up again this past week in the Freddie Mac Weekly Survey. The 30 Year Fixed Rate Mortgage was at 5.66% in today’s Freddie Mac survey results and the 15 Year Fixed Rate Mortgage was at 4.98%.

On September 21, the Federal Reserve is expected to raise the Fed Funds Rate target by either 0.50% or 0.75%. The Fed is also expected to start reducing the amount of mortgage and treasury securities on its balance sheet by $95 billion every month, which they refer to as tapering or tightening. According to their plan the balance sheet should be below $8.4 trillion at the end of 2022 and below $7.3 trillion at the end of 2023. The Fed will need to significantly ramp-up the process of getting assets off the balance sheet if it wants to meet stated goals. They were supposed to taper $142.5 billion since June 1, but as of last week have only reduced the balance sheet $61 billion $89 billion since then. It seems hard to believe the Fed can suddenly reduce the balance sheet at four more than three times the current pace without causing significant dislocations in bond markets. (Updated 5:00 pm Eastern to reflect balance sheet reduction numbers released by Fed later in the day.)

Mortgage rates are likely to remain volatile in this uncertain environment as the Fed tries to navigate this last part of the year and regain some credibility. It’s still difficult to predict what may happen to rates if or when the Fed starts to taper according to the actual plan.

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Freddie Mac’s Weekly Survey was released this morning with its most recent assessment of the mortgage rate landscape. See the details of their survey below.

(dynamic chart with current data)



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