Rate correction in August

In the days leading up to the highly anticipated Jackson Hole Symposium, the 30-year fixed rate mortgage shot up 44 basis points to 5.73%. The 15-year mortgage didn’t fare much better with a 41 basis point increase to 5.01%, sailing into 5s territory once more. 

current outlook:

Mortgage rates are at the highest range we’ve seen in over a month. The best explanation for this is that rates fell too quickly in July and are simply correcting for this in August. Now, with a clear upper and lower limit in place, interest rates shouldn’t shift too much without reasonable cause from the economy. As it stands, Fannie Mae’s ESR Group predicts GDP will be flat for the year 2022 before dipping down to -0.4% in 2023. Similarly, they predict that the oncoming modest recession will eventually catch up to employment, leading to slowed gains in 2022 and negative growth in 2023. On the housing side, homeowners continue to be in a great position with housing prices still rising across the nation and inventory remaining tight. Notably, multi-family for-rent housing starts rose in Q2 to 142,000 units, making it the best quarter for rental multifamily construction since 1986.

Rate correction in August

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top