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Mortgage rates are low because of 4 forces, each in place since 2009. Today, those forces fade into history. When they're gone, so will low mortgage rates. Read why mortgage rates are positioned to rise, and rise sharply.
The mortgage market is loaded up with 3 years of negative expectations. And, once those forces reverse, they'll reverse quickly, sending mortgage rates soaring. It's time to execute on that mortgage plan. Rates are poised to rise.
Mortgage rates are ultra-low these days, but they ought to be lower. Mortgage lenders may be holding mortgage rates artificially high.
Mortgage rates are getting slaughtered this month; rising every day since January ended. It's an historic losing streak for conventional mortgage rates.
There's an old adage in the mortgage business: "Rates take the stairs down, and the elevator up." It's supposed to mean that mortgage rates go up faster than they come down. It's practically gospel among the older crowd. Turns out, though, it's completely false.
Forget about that 4.500 percent, 0-point mortgage rate you passed on last month. It's gone. Today, conforming mortgage rates are bearing down on 6 percent. For a homeowner in Cincinnati with a $300,000, fixed-rate home loan, the impact is huge. Since the unofficial start of summer, rising mortgage rates have added $240 to a monthly mortgage payment.
If you've never heard of mark-to-market accounting, you're not alone. It's an accounting method so dually complex and arcane that unless you need it in the day-to-day functions of your job, you'd look at its description and be, like, "whatever".
Mortgage bond markets are signaling a slight return to risk this morning. If you're watching the wrong market indicators, though, you probably didn't get the memo. Looking at the chart above, we see that as of 9:02 AM ET: Mortgage-backed securities are improved by 28 basis points 10-year U.S. treasury...
After writing yesterday's blog post, my ThinkPad went blue. Cue the video above. It's a shame because the post went deep on Wall Street's recent troubles and how each piece of bad news actually helps everyday homeowners. When I went to publish, the post vanished. And by that point, markets...
For years, people unfamiliar with the mortgage industry have said that the government's 10-year treasury note is a reasonable proxy for mortgage rates. This is flat out wrong. The only security that matters to mortgage rates is the price of a mortgage-backed bond. The chart at right supports this idea....
This chart may read like gibberish, so I notated it. It's meant to illustrate that daily mortgage rates are not based on the yield of the 10-Year Treasury Note. Sure, there is a long-term correlation between the two, but "long-term" doesn't do us any good when we're looking to lock...
The trend is still holding, so to hammer the point home: to know what mortgage rates are doing lately, just check the stock market. As stocks go down, mortgage rates go down As stocks go up, mortgage rates go up This is not a long-term, direct relationship by any means...
Home buyers and other people in the market for a new mortgage should be thanking the Fed right now. In its post-meeting press release last week, the Federal Open Market Commitee made a few choice statements about the economy that helped mortgage rates fall for the first time in 6...
If you look at mortgage rates today and compare them to January's numbers, not much has changed: 30-year fixed: Still hovering near 6 percent 7-year ARM: Still lower than 30-year fixed rates 5-year ARM: Still lower than 7-year ARM rates But on a day-to-day basis, the market is not as...
Broadly, mortgage rates fell in 2007. It's befuddling because there are two major reasons why mortgage rates should have increased in 2007: The U.S. dollar took a precipitous decline against world currencies, devaluing mortgage bonds Inflation ran beyond the top of the Fed's comfort zone for most of the year,...
I am working with a Dublin-based real estate developer, providing Irish real estate investors with mortgages for United States-based properties. A project on which we are currently working has been interesting in context of how the mortgage market is changing. When we started work on this Chicago-based condo building, the...
Most American homeowners: Live in homes whose loan sizes are less than $417,000 Own one home and call it a primary residence Can document their income using W-2 statements and/or tax returns Have at least a modest savings account Have at least the average credit score of 678 Do not...
If you're a first-time reader, here's the first thing you get to learn at The Mortgage Reports: Mortgage interest rates are determined by the price of mortgage bonds. Nothing else, nothing more. If mortgage bond prices are down, mortgage rates will be higher. If mortgage bond prices are up, mortgage...
Did you see the BNP Paribas press release last week that said it's halting withdrawals from some of its funds? My favorite part is how blunt the first sentence is below (bold added for emphasis): "The complete evaporation of liquidity in certain market segments of the US securitisation market has...
A favorite question from my clients is "Should I lock my mortgage rate, or should I float my mortgage rate?" I am firmly in the "Lock Now" camp and have written about this more than a few times. My standard answer to the questions has lately taken a different spin,...
Matt Murphy, the man who caught Barry Bonds' 756th home run ball, is holding onto a valuable piece of babseball memorabilia. According to some, the ball could fetch as much as $500,000 in auction bidding. If in the future, Barry Bonds is found to have used steroids, though, the value...
Did you notice: In what took many state governments over 18 months (and counting) to "fix", "free markets" eliminated in three days. Regardless, a few years from now, state legislators in Illinois, Minnesota and elsewhere will take credit for the reduced number of foreclosures in their home states, without even...
Earlier this month, CNBC featured a segment on how sub-prime mortgages work. The shame of it, though, is that it aired at a time when the probable audience was already well-versed on the topic. This would be like holding a seminar on how to throw a baseball to the attendees...
Yesterday was a favorable day for mortgage rates as average housing data and momentum trading carried bond prices higher. Bond prices up, mortgage rates down, of course. Today, those gains have already been erased. The Bank of England's June 7 meeting minutes reveal that a rate hike may be imminent....
You didn't have to wake up to "I Got You, Babe" this morning to realize you've been living the same day over and over again. Wake up, watch mortgage rates go higher, fall asleep. Repeat. Repeat. Repeat. Today, the mortgage bond sell-off seems tied to speculation that Bank of Japan...
I just finished up a call with a client in which we discussed the current state of mortgage markets and why mortgage rates have risen so far, so quickly. 30-year fixed mortgage rates are up as much as 0.625% over 30 days. That's ridiculous given the relatively low volatility of...
The National Association of REALTORS has changed their 2007 housing forecast for the worse, as reported by CNNMoney and other news sources. Four weeks ago, this would have been terrific news for mortgage rates shoppers. Today, not so much. Mortgage rates are only slightly improved on the day. Why? Because...
Three steps: Re-read the headline Re-read this post Lock your rate already Mortgage rates are now at a 10-month high. Just yesterday, it was seven months.
For just the second time in two years, the tide in mortgage rates has shifted discernibly. Unlike last time, though, the news is not good for mortgage shoppers. We talk about it a lot: mortgage rates are not picked from thin air. Just like stock prices, they are based on...
Mr. Deeds: [Stepping into an elevator] So how's the elevator business treating you, Reuben? Reuben: It has its ups and downs. Up and down. Up and down. Up and down. It's been a stomach-dropping ride over the past two weeks for mortgage rates, mostly because traders can't find the answer...
If you were floating your mortgage rate overnight, there is some bad news coming out of the trading pits. Mortgage rates are getting killed this morning. Low trading volume related to Good Friday generated extreme reactions to this morning's Non-Farm Payrolls. When the jobs report showed 180,000 new jobs created...
So far today, the Dow Jones Industrial Average is down more than 200 points and trading curbs have been put into effect. This is good news for mortgage rates. If stock markets were the Oscars, we'd have seen about fifteen Jack Nicholson reaction shots by now. When stocks markets drop...
Just to make sure I don't fall into Chicken Little territory after last week's "you better lock now" post, I thought I'd share how swiftly mortgage rates retreated after yesterday's FOMC announcement, and alert you to market improvements. The FOMC press release hit the wires at 2:15 P.M. EST. Here...
With traders around the world on vacation (or otherwise taking it easy) this week, the impact of housing reports will be magnified because liquidity is missing from markets. Since mid-Summer, the Fed has repeatedly told us that housing will lead to an economic slowdown. As a result, markets have placed...
Mortgage rates are sitting higher than their December lows, and will become more and more volatile as the year comes to a close. This is Holiday Season and more and more traders will be taking leave with each passing day. This removes liquidity from the market because there are fewer...
It's a wild and crazy market our there, folks, and today just proves it. Today's mortgage rate rally not only over, but it is now reversing. When markets are good, take what you can. You never know how long it's going to last. Update (2:16 P.M. CST): Mortgage rates have...
Just how much impact did last week's economic reports have on economic opinion? On Monday, markets expected with 24% probability that the Fed would lower the Fed Funds Rate in January. By Friday, that decreased to 8%. Considering that many mortgage rate locks are honored for 30 days, it should...
This morning -- in the middle of prepared remarks made at Maggiano's Little Italy -- Chicago Federal Reserve Bank President Michael Moskow said that the Fed pays close attention to the inflation expectations of markets. There is a direct link between the expectation of inflation and actual inflation, he told...
The European Central Bank and the Bank of Japan both indicated yesterday that their respective interest rates may rise. Both groups are equivalents to our Federal Reserve Bank. As a story that would normally get buried on Page 22, I thought I'd bring it to the forefront just to hammer...
This is the last week of August, and we are heading into Labor Day Weekend. Many mortgage market players are on vacation right about now. It's unfortunate because after a dull week, the market will get hit between now and Friday with data, including Friday's very influential jobs report. Unfortunately,...
