Where Cotality’s chief economist really believes rates are going
Selma Hepp (pictured top), chief economist at Cotality, said it has been a rough stretch for housing.
“I think, unfortunately, it feels like a one-two punch for the housing market,” Hepp told Mortgage Professional America. “We had this very fleeting moment of relief in February, and then everything sort of changed from there.”
Base case and refi pool
The Mortgage Bankers Association (MBA) reported Wednesday that the average contract rate on a 30-year fixed-rate conforming mortgage was 7.49%.
To fall from that rate, it will likely take geopolitical unrest easing, energy prices and inflation stabilizing, and bond yields coming off their highs.
“One scenario is inflation does come in, slowly, but month after month we see some improvement to give people enough confidence that inflation is coming in,” she said. “In that case we sort of fall off that 7.5% where we are today and go to the upper 6s if we’re talking about mortgage rates. I don’t think the spread itself changes at this point. So we go to the 6s, and we move to the mid-to-high 4s for Treasuries. That’s a base case scenario for me.”
