Mortgage Rates Climb For Second Straight Week
Posted by Dennis Pease on Saturday, June 13th, 2009 at 8:12pm.
Yes! Rates are up from last Friday, but they are down from earlier this week. The Bond market took a pretty good beating from a few of the economic reports that came out, indicating that things might be getting better. But, the big hurt was that several of the foreign buyers of US debt
( US debt is in fact our bond market), indicated that they had little confidence in our ability to repay that debt. So, China , Russia , the European market, etc said they “may not” invest in our bond market. This drove the price of bonds down, and likewise, mortgage rates up.
Is this starting to make sense to you in how it all works? After all, when the sub prime implosion hit, the banks no longer wanted to buy mortgage backed securities, and most of them actually couldn't, because they had no money to buy with. Then things turned around somewhat for the banks after the TARP was enacted, and they could have purchased mortgage loans, but chose not to because they were concerned about the ability of homeowners to repay their debt. At this point interest rates would have gone up tremendously, like they did in the early to mid eighties. 18% in October of 1983 was the going rate for a mortgage loan. The difference this time is that the Federal Reserve stepped in to start buying mortgage backed securities when the banks were not able or willing to. The more loans the Fed bought, the better rates became.
About 10 days ago the Fed indicated that they weren't really into buying more loans, most likely as a test to see what the market would do on its own. You know how you have to let go of the seat when your child is learning to ride a bike? That's what the Fed did! But then when rates started going up, threatening the housing market recovery, the said they would once again grab the seat if the market started pedaling faster and stronger. So, right now, it's still a test of confidence. The Fed is not confident that the market will keep pedaling, and, the market is afraid the fed is going to let go too soon.
I guess this is where I say, “we'll have to wait and see”. There may be a few scraped knees before the bond market finds their balance, and keeps riding on their own. Of, course, the rest of the story, is how the market then just keeps riding with more and more independence, and becomes totally oblivious to the wants, needs, and dreams of the those who held the seat and taught them to ride. That's a whole other story, and I've obviously gone too far with this one.
I did want to take a moment to reiterate the fact that I, and we, at Precision Funding, having our own, in house funding ability of loans; are able to internally handle our own HVCC appraisal scenarios. We have a list of trusted local and rural appraisers that we draw from, and are not subject to the extreme headaches of the wonderful thing congress did for the consumers. Really, it's faster, more accurate, and more trusted by the lenders than what they are experiencing in the new world of appraisal roulette. Call or email me if this appeals to you.
I'll be available all weekend once again, by cell phone. Call if I can help you in any way.
The following rates are based on 30 day locks with no discount points, as of this afternoon. They are not come ons, they are the rates your buyers will most likely get from a reputable lender, regardless of what is advertised. Certainly there are other specialized programs available, depending on the qualifications of the buyer.
30 year fixed conforming = |
5.500% |
|
15 year = |
5.125% |
|
3/1 ARM = |
4.500% |
|
5/1 ARM = |
4.875% |
|
Jumbo fixed = |
5.750% |
|
Jumbo ARM = |
3.900% |
|
FHA/VA 30 year fixed = |
5.500% |
|
Prime rate is currently = |
3.250% |
Authored by Lorin Wamsley, CMPS - Senior Mortgage Consultant, Precision Funding Phone: 541-681-8787
Search all Eugene Oregon real estate listings , call us to schedule any home showings or if you have any questions.
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Share5 Responses to "Mortgage Rates Climb For Second Straight Week"
The mortgage rates creeping up may partially explain why there is such a rush to buy homes in San Diego right now. Inventories have dropped dramatically. Multiple bids and overbids have become the rule rather than the exception for any reasonably-priced house or condo in San Diego County... And here that means anything under $500,000. San Diego luxury homes are still selling slowly after price reductions. Upper-end prices haven't adjusted yet to the degree that more mainstream homes have. Jumbo loans are more difficult to get, and upper-end buyers are still acting skiddish. But it's safe to say that we've found a bottom for entry-level homes, at least for the time being. Median prices have increased for 5 months straight, despite slow sales at the upper end.
Posted on Friday, June 19th, 2009 at 1:46 AM.
I think even though rises the mortgage rates for second time around, it's still the lowest rates compared to previous years.
Posted on Thursday, June 25th, 2009 at 7:49 AM.
I am not surprised to see that rising mortgage rates are inspiring some people to go ahead and make purchases. I know there were plenty of savvy buyers who were simply waiting for everything to hit rock bottom before making a purchase so they could be sure to get the best deals possible.
Posted on Sunday, June 28th, 2009 at 4:30 PM.
Dennis,
I love how you refer to teaching you child to ride a bike and let go it's great analogy with a horrible result as soon as the government noticed that rates were climbing they stepped back in. That is where the problem it seems like it's almost a fake market. Market's actually need to be market's let them do what they do naturally and stop trying to control something that can't be.
Posted on Wednesday, July 1st, 2009 at 9:24 PM.
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It is due to the recent rise in long-term bond yields. Average mortgage rates across the country continued climbing the third straight week.
Posted on Wednesday, June 17th, 2009 at 5:21 AM.