LERETA, LLC CEO John Walsh is yet another executive on the list that feels that the rise in interest rates will not completely shake up the mortgage industry right away, but the real concern rests in 2016.
"Our view is that a rate increase this week should have little impact on the mortgage market. An increase has been anticipated for some time and most recently the markets have been assuming that an increase is now imminent. An increase has already been built into mortgage prices so although there may be a short-term additional bump, our view is that mortgage rates should remain relatively flat for the next several months," Walsh explained to MReport.
"The real question is how fast the Fed will increase rates in 2016 and what the Fed chooses to communicate about 2016 in this week’s announcement," Walsh said. "Lenders are clearly concerned that rapidly increasing rates could curtail refinance volume, although there is a strong argument that cash-out refinances could become a more important part of origination volume as more of the country sees continued home appreciation. Regardless, almost all lenders believe that the purchase market will be the primary focus. The challenge will be the distribution of a slowly recovering purchase market as almost all lenders focus on the channel."