With economic conditions and expectations improving, especially since the election, it’s very likely the Federal Reserve will continue to tighten throughout 2017. Rate hikes will be limited, but 3.00% mortgage rates are probably a thing of the past.
Lenders are already slashing their refinance-volume expectations for 2017 and beyond, according to a mortgage lender sentiment survey conducted in December by Fannie Mae.
In addition, Kroll Bond Rating Agency (KBRA) believes we’ve likely seen peak lending: “While 2016 has been an excellent year for the US mortgage industry, with almost $2 trillion in new loan originations, we believe that this year is also likely to be the peak in terms of lending volumes for years to come.”As I’ve pointed out several times before, when interest rates are on the rise, short-term municipal bonds are the place to be, since they’re less sensitive to rate increases than longer-term bonds, whose maturities are further out.
I want to wish all of my loyal readers, investors and shareholders a most Happy New Year! As we begin a new American chapter in 2017, complete with a new series of challenges both big and small, remember to hold fast to H.O.P.E.—Have Only Positive Expectations!
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