The demand for corporate debt and higher yields is luring away buyers of treasuries. The purchase and sale of US Treasuries affect smortgage rates. When treasuries are bought, rates stay stable or drop. When they are sold rates increase. There was heavy selling today causing the mortgage markets to respond by increasing interest rates.
I recommend that you lock your loans immediately. Floating is way too risky as investors scramble to find higher returns on their investments. Enonomic recovery are part of the reason and investors preparing for higher taxes in response to health care legislation that passed. Investors are not buying the statement that the deficit will go down. Wall street expects higher taxes to fund the health care reform. Hard to determine if this caused the run up in rates today.
Tomorrow the 7 year note goes on sale but nobody expects many buyers. We may see aother sell off tomorrow causing mortgage rates to rise. The duration of this will be determined on te economic outlook. If investors believe the economy is improving they will buy socks. Mortgages are attractive in bear markets due to their conservative nature.
Lock 'em if you got 'em.
How to Shop Mortgage Rates
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Great advice Nevin! You've been saying they were going up and they just may continue doing so. Buy now!
Excellent post Nevin. This is the type of information that buyers need to know so they can lock in their rates and we need to know so we can assist them better.
Yep, it's starting to get ugly. I believe we had 2 or 3 re-prices today with our lenders. I still think rates are pretty attractive...maybe we've gotten a little spoiled? ;-)
Emailing this to my sister who is in the process of buying! I knew this was happening, thanks for the 411 Nevin!
Wanda - Thanks! I knew it would happen and I don't think it's over yet : (
Craig - You said it You said it
Cari - LOL I agree! People who say, well 5% is pretty good but I think rates might come down a little more. Geez....how about when they hit 0% sir/ma'am. Is that low enough? Well maybe they are right. never in my wildest dreams did I think our government would pay people to buy homes! Thanks for stopping by
Renee - She can call me anytime if she has questions about the process. Although I am not licensed in NV I am always glad to help
Nevin - It was nice that things stabilized a little by the end of the week. One thing the mortgage markets have not had in a while is volatility. Rates may not skyrocket when the FED stops buying but my bet is that things will certainly be a whole lot more unstable than they are now. Have a great day. ~ Doug