So as we all are back at "it" after the holidays now, I thought it an appropriate time to take a look at the mortgage market for 2013. Or at least how it see the year.
As the year wound down last month. It appeared the 2013 year would be a banner year for originations with government programs and ultra low rates spurring more home sales and continued refinancing activity. And I think that is still holding true with an additional few items that could tweak the outlook.
Most notabley, the Fed recently released commentary that some of the governors would like to see fed mortgage purchase volume slow down in the middle to year-end 2013. The 10 yr promptly shot up and mortgage rates spiked. However the move was muted due to the mortgage market absorbing some of the increased pricing by lowering margins. What this does tell us is that rates can move fast and as the government exits, the private party will need to become more involved.
The real issue is that if the private market has to return to the mortgage securities market, they will need higher yields undoutedly, and some clarity with mortgage rules and regulations. All of which seem to be very fluid issues with no clear resolution. The government still participates in 93-97% of residential mortgage originations. So it is clear if they exit, who will pick up the slack, or does mortgage volume plument, driving up costs and rates dramtically. It sounds dire but please take it from a seasoned veteran, rates can very easily rise to several points in a year.
My motto today, is a bird in the hand. If you got em' lock em'. Which means of course, if you can see benefit from refinancing do it now, before its too late. No one can time a bottom.
If you see value in purchasing a new home, or an investment home. Do it. Rates and programs are very aggressive, and you may never see rates this low again.
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