Mortgage rates forecast

After a booming 2020, more mortgage lenders than ever before expect diminishing margins in the coming months as climbing interest rates set up heightened competition.

Consumers may want to strike while the iron’s hot and apply for loans now, before rates get much higher.

And there are some brawls on the field affecting the direction of business for the rest of this year.

The gap between those that considered it a good or bad time to buy narrowed 10 percentage points in February, the tightest spread since last April, Fannie Mae found.

With the latest growth, interest rates spiked 37 basis points since the calendar flipped to 2021 alongside rising Treasury bond yields.

After several weeks of resistance, mortgage rates are now moving in lockstep with the recent increases in the 10-year Treasury yield.

With the most recent stimulus aiding economic recovery, mortgage lending’s feeding frenzy could be coming to an end.

The cost associated with borrowing money to finance homes now appears more likely to remain stable rather than continuing to decline, which should eventually slow refinance activity.

With low mortgage rates billowing demand as homebuying season approaches, consumer confidence for selling jumped in January, according to Fannie Mae.

Whether or not the cost of home loans go up may hinge on the labor market recovery, and right now bond yields suggest they are heading in one particular direction long term.