Some self-proclaimed experts were expecting mortgage rates to keep their summertime levels and stay low into 2022. Indeed 30-year and 15-year rates are low by historical standards, but they aren’t as low as they were over the summer. Orion’s brokers are seeing plenty of refinances, however, despite rates creeping slightly higher, and we expect that refinances will continue, perhaps shifting from rate & term to cash out.

The fast answer as to why rates have moved up slightly is that the U.S. economy is picking up steam. Restaurant meals, cars, hotel stays, nearly everything has moved up. Prices are increasing, and this has been reflected in both consumer and producer price indices produced by the government.

Last week we learned that the Fed’s Beige Book indicated that, among the 12 Federal Reserve districts, economic activity remained strong in August and September and the forward outlook is positive despite the supply chain headwinds facing many industries. Those headwinds led to a 1.3 percent decline in industrial production during September. Despite the decline, industrial production is operating at near pre-COVID levels, a sign that consumer demand remains strong.

As many of Orion’s brokers and our AEs know, demand for single family housing remains healthy across the nation. An increase in existing homes sales during September indicates that the slowdown towards the end of the summer is more likely due to a lack of supply rather than waning demand. Existing home prices were 13.8percent higher than twelve months ago, although this represents a significant slowdown from the 20+ percent annual gains observed earlier in the year.

For our broker’s clients shopping for a home, it is good to know that as housing supply and demand become more in-balance, the large annual gains should continue to subside, providing some relief for buyers who are also facing higher interest rates. Rates of all types have moved higher due to our economy heating up. But Orion is offering some great competitive market rates, as well as some unique programs, to help your borrowers buy a new home or refinance their existing property.

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