News & Insights

Mortgage rates recently dipped close to 6%, a meaningful psychological and economic threshold for both borrowers and lenders. That move has been closely tied to the GSEs’ announcement of roughly $200 billion in mortgage-backed securities purchases, which helped tighten MBS spreads and pull conventional mortgage rates lower. While that development has sparked comparisons to the Federal Reserve’s MBS buying during the pandemic, today’s environment and its implications for credit unions, looks very different.

Recent data show a mixed picture in the mortgage and MBS markets. Overall delinquency rates edged down slightly in Q2 to 3.93%, though they remain above post-pandemic lows.

Mortgage rates have shown little directional momentum in recent months, and the outlook suggests more of the same. The latest industry research forecasts point to the 30-year fixed mortgage rate staying in the high-6% range through year-end 2025, with only modest room for improvement.

Halfway through 2025, the market for bonds tied to home loans – known as CMOs (Collateralized Mortgage Obligations) and MBS (Mortgage-Backed Securities) – are going through some changes. These changes are mostly driven by the overall economy, government policies and what people are anticipating with interest rates.