Originally posted on CUInsight.com.
Guest post written by Nizar Hashlamon, EVP, Client Relations, Mortgage Cadence.
Mortgage Cadence, formerly Prime Alliance, is the NAFCU Services Preferred Partner for Credit Union Mortgage Solutions.
My colleagues and I talk frequently about the coming changes in mortgage lending. The 100-years refinance (exaggeration intended) cycle will end this year or next. In its place is likely to be the most sustained purchase-money market since the 1950s through the 1960s. There are signs of this already. One headline last week in Housingwire read ’75% of Americans would rather buy now than later’. No doubt they want to take full advantage of the lowest rates in history before home prices rise too much further.
You know this. Everyone knows this. Helping people finance home purchases for the next decade or so is some of the most rewarding work mortgage lenders will undertake during their careers. Many first-time homebuyers will get their homeownership start in the next few years. Our chances to work with them for a lifetime begin now.
There’s a potentially dark side to the coming market changes. Rates will rise. You know this, too. What you might not have thought much about, however, is how much they will rise or for how long, and more importantly, what will the impact be on your secondary marketing pipeline. Start with this fact: rates today are at their lowest point since 1941. Since 1941 rates trended upward until 1985 when the 10-year Treasury rate peaked above 14%. From that point rates began their downward trend, bringing us to where we are today, back to where we were 70 years ago.