Big news in the refinance market this morning. The additional .5% fee that was going to be added to all conventional refinances has been delayed from September to December. This is good for those who are looking to refinance in the near future. However, to the rest of the mortgage industry, this is still a large fee that will have an adverse effect to many consumers and the industry as a whole.
Jerome Powell will be speaking tomorrow regarding the execution of the Feds goals of raising employment and price stability. The big concern that the mortgage industry has is any news coming out regarding inflation. For a while now, the Fed has targeted 2% annual inflation. With the massive stimulus of the past 2 quarters, there are talks of the target being raised. This will negatively effect rates because lowering the value of the dollar means any asset with a fixed return is now worth less.
Mortgage bonds continue to fight their 50 day moving average. With the risk of an inflation announcement pushing rates higher, we hold a locking bias.