Immediately following the Fed’s announcement, the MBA had not changed its forecast for a rise in mortgage rates from just above 3% to 4% by year-end 2022.
Even before the Fed’s announcement, nearly two-third of respondents to Fannie Mae’s latest quarterly lender survey were already expecting profits margins to drop, up from 46% the previous quarter and 48% a year ago.
Rates, the waning of pandemic-related stimulus programs, and the strain from rising home prices are key reasons why 31% of lenders surveyed by Fannie Mae expect a change in borrower demand that could lead to lower profit margins.
That number was up 13 basis points above the 2019 average, but down from its peak of 174 in the third quarter of 2020, based on an analysis of data from the Mortgage Bankers Association, Federal Reserve, Fannie Mae and Freddie Mac.