Home-Loan Drop Pushes Fed Away From Mortgage Bond Taper
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Federal Reserve policy makers, while considering today whether to taper $85 billion in monthly bond buying, confront a drop in demand for home loans that argues against a cut to their mortgage bond purchases.
A surge in mortgage rates to two-year highs has undercut borrowing, pushing down refinancing by more than 70 percent since last September. Wells Fargo & Co. said this month originations may fall 29 percent this quarter, while JPMorgan Chase & Co. said volumes may plunge 40 percent in the second half compared with the first six months of the year.