An article in Bloomberg posted June 16 notes that even though unemployment is high, credit is tight, and scientists are warning that a dangerous second wave of the coronavirus is coming, U.S. mortgage companies are having one of their best years in history. Business is up, not only from re-financing, but also from home purchases. Mortgage companies are enjoying high profits, not just from the volume of business, but also from interest rate spreads:
Interest rate cuts by the Federal Reserve have pushed down the average rate for a 30-year mortgage to a shockingly low 3.2%, but that includes a thick cushion of profit for originators. Lenders sell most of the loans they make, and the spread between what they charge borrowers and what they’re able to sell the loans for, typically benchmarked by 10-year treasury yields, was at its widest in April since 2008.
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