Megan Munley joined me recently to talk rates, refinances, and more.

I’m super excited to be joined by Megan Munley from Fairway Independent Mortgage to give a big update on mortgage rates in 2021. She has some great insight to share with us today on how rates are not only affecting buyers, but also affecting sellers.

Cited below for your convenience are timestamps that will direct you to various points in the video. Feel free to watch the full message or use these timestamps to skip to topics that interest you most:

1:20- Megan’s 2021 predictions for mortgage interest rates

4:15- A look at historical interest rate trends and projections from Moody’s

6:45- Why all buyers need to consider their timeline in addition to the interest rates

10:00- How Megan is actually helping sellers in this market through refinances and subsequent purchases

12:00- How supply chain issues are affecting new home construction timelines and prices

12:40- Wrapping things up

Here are the key takeaways you need to know about interest rates in the mortgage world right now:

1. It started last week with consumer spending. The consensus for the release was 1% and it increased 5%, which blew everyone away with concerns about inflation. Everyone spent their $400 checks on “stuff.” This kicked it off. The markets are now looking at the new stimulus bill about to pass and the $1,400 that millions of Americans will get.

All of this points to a quicker economic recovery and inflation. A quicker recovery and the likelihood that vaccines will be widely distributed by summer points to the Fed beginning to taper their purchases. As Moody’s forecast suggests, we will have rapid employment growth and with the Fed tapering, rates will be pressed upwards. Look at the first slide from Moody’s which shows this (4:58 in the video above).

2. The Moody’s Analytics rates forecast (4:22 in the video above) is the result of us exiting the COVID pandemic, a likely strong economic rebound, and unprecedented auction volume of treasuries which will result in price declines and yields rising. This isn’t dramatic, but Dr. Mark Zandi of Moody’s points to mortgage rates solidly in the 3s by Q3 of this year.

“While refinances will slow, purchases should continue with pretty solid demand.”

The truth is this:

The super-low rates were due to a sick economy and the Fed stepping in with dramatic QE driving yields low. They were great for mortgages but unsustainable. As the economy gains strength, the Fed won’t need to intervene and rates will rise to more normalized levels—3s in 2021 and 4s in 2022. These are still extremely low rates, and while refinances will slow, purchases should continue with pretty solid demand.

Change is inevitable in our industry, but the fundamentals of economics will drive this. The trend is up, but there will be intermittent days in between where there is some slight pullback, like today. Don’t let these days fool you. Lock, don’t float.

If you have any questions for Megan, feel free to visit her website or reach out to her by phone at (215) 710-0722 or by email at

If you have any other questions for me, don’t hesitate to reach out via phone or email. I look forward to hearing from you.