The Trump Effect
What a difference a few months can make. Early in the fall the Federal government made sweeping changes to mortgage qualification rules, the most prominent being the requirement that all insured homebuyers qualify at the posted 5-year fixed rate. The change in qualification rules for homebuyers means that the posted 5-year rate has become much more binding and will now have a more immediate and impactful effect on mortgage demand than in the past. Additionally, less publicized changes such as eliminating the availability of insurance on mortgages with greater than 25-year amortizations or potential default insurance risk sharing, are putting upward pressure on rates offered by lenders.
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