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Category Archive: ‘Interest Rates/Loan Limits’

3.25% Mortgage Rates On The Way?

Need more frenzy food?

This guy thinks we’ll see the yield for 10-year-treasuries at 1.50% (and maybe lower).  Mortgage rates have run traditionally about 1.75% above the 10-Y yield:

In August, Komal Sri-Kumar predicted that yields on the U.S. 10-year Treasury note would fall below 2 percent within six months. The 10-year yield sits just above 1.8 percent, and he projects that U.S. bond yields will tank even more.

If the Federal Reserve decides not to raise interest rates in the near future, the U.S. 30-year Treasury yield will slide toward 2 percent while the 10-year will continue lower to about 1.5 percent, Sri-Kumar, president of Sri-Kumar Global Strategies, said Wednesday.

If the Fed decides to raise rates, Sri-Kumar believes the amount by which rates are hiked will determine reaction in both U.S. bond and equity markets. The federal funds rate jumping by a quarter of a point would not have a “significant” effect on U.S. Treasurys, he said.

He also contended that the Fed is more likely to resume quantitative easing by the end of 2015 than raising interest rates by June.

Posted by on Jan 22, 2015 in Interest Rates/Loan Limits | 2 comments

LOW Rates, Better Terms

mortgage rates

Not only did jumbo 30-year fixed rates hit the lowest I have ever seen yesterday, but more creative terms are coming out too.

These terms were sent to me yesterday by a local lender:

Just priced a 30 year fixed 1.2 million loan and it’s 3.625 with no points.

We have a 95% purchase money with loan amount up to $850,000.  The 5/1 is 2.75%, 7/1 is 3.00% and the 10/1 is 3.25%.

AND we have a 30 year fixed jumbo up to 1.5 million at 90% with no mortgage insurance.  The rate is 5.125 with no points.

The fantastic rates and terms available should help buyers get off the fence, and buy a little more house than they could have 6-12 months ago.

This will help the low-down folks too:

Posted by on Jan 7, 2015 in Interest Rates/Loan Limits, Jim's Take on the Market, Market Conditions | 1 comment

Lower Rates?

bofa photo

Why stop at 3.25%? Let’s just lower mortgage rates to 2.5%!

An excerpt:

An examination of break-even inflation rates suggests sharply lower oil prices are a key driver of the 90 basis points rally in 10-year Treasurys and the 60 basis points drop in mortgage rates in 2014, according to analysts at BofA Merrill Lynch.

Most real estate economists are forecasting mortgage rates will rise in 2015, but the recent steep drop in oil prices could change all that.

“The possibility of further declines in oil prices increases the chances that mortgage rates drop to the 3.25%-3.5% range that we believe is necessary to get housing back to affordable levels for many,” says Chris Flannigan, ABS and MBS strategist at BAML. “We have maintained the view that 4% mortgage rates are too high to allow for sustainable recovery in housing. In our view, a drop to the 3.25%-3.5% mortgage rate range would eliminate the current benign technical conditions prevailing in the agency MBS market, increasing supply from both refinancing and purchase mortgage channels. Such a rate drop would also create significant upside risk to our forecast of roughly $1 trillion of mortgage production in 2015.”

Flannigan says that if sustained low rates were realized, which could be possible if sustained low oil prices are realized, the market could see realized mortgage production, which was pegged at a 2.3% 10yr, exceed the forecast by 30%-50%.

Posted by on Dec 13, 2014 in Interest Rates/Loan Limits | 1 comment

Lowest Rates Since Summer 2013

rates Dec 2014

Looking forward to a great 2015! From MND:

Mortgage rates moved only slightly lower today, but it was enough to bring the end-of-day average to the lowest in more than a year an a half.

For the record, there were lower rates available on the morning of October 15th, but markets moved so much during the day that the last rate sheets of the day weren’t quite as strong as today’s.  Similar rates were also seen at the end of the day on December 1st.

Posted by on Dec 10, 2014 in Interest Rates/Loan Limits | 0 comments

Mortgage Rates 2015


With the Fed announcing the end of QE, the next concern is when they will start raising rates.  Mortgage rates are only indirectly tied to any move the Fed might make – which usually means that mortgage rates will start inching up in advance.

Here is a quote from Capital Economics about their expectations:

Unexpectedly, the Fed still thinks it will be a “considerable time” before it begins to raise interest rates. Indeed, the Zero Interest Rate Policy remains in full force, as it has been since inception at the end of 2008.

“We didn’t expect that language to be dropped at this meeting given there is no scheduled press conference, but we wouldn’t be surprised if it is changed at the upcoming December meeting,” Capital Economics said. “Overall, we still believe that the Fed will begin to raise rates sooner than generally expected, with a March 2015 hike the most likely outcome.”

If the Fed adjusts their statement in December, expect mortgage rates to get a jump on any potential rate increase.  Buyers have been cautious for months, and we will probably see a couple more negative readings of the local Case-Shiller Index by next year.

If mortgage rates bump back above 4%, and maybe into the mid-4%s, they won’t kill the 2015 market.  But if you are thinking of selling your house after another 5% to 10% increase in value, you might be in for a long wait.

Posted by on Oct 30, 2014 in Interest Rates/Loan Limits, Jim's Take on the Market, Thinking of Selling? | 3 comments

‘Best Rates Since June 2013′

Oct 14th rates

We should see a resurgence in buyer interest now that rates are under 4%.  They probably won’t pay a lot more, but if sellers can live with the same price as the last comp, they should be able to sell.

From MND:

Mortgage rates continued living the dream today, falling decisively past last week’s lows to claim another instance of “best rates since June 2013.”  Today’s move was exceptional compared to last week’s (or just about any other move lower of 2014 for that matter).  After heading into the weekend in relatively conservative territory, the bond markets that underlie mortgages were greeted with massive movement in broader financial markets over the 3-day weekend.

Some of that movement took place late on Friday–too late for rate sheets to experience much benefit–but most of it occurred in global bond markets during Asian and European trading overnight.

Motivation varies depending who you ask, but the concept of “global growth concerns” is the common thread running through most of the reasons offered for the drop in rates.

Last week’s best moments saw the most prevalently-quoted conforming 30yr fixed rates hover between 4.0 and 4.125% for top tier borrowers.  Today’s rates all but eliminated 4.125% from that list.  In fact, 3.875% would now be more common than 4.125% (assuming a flawless loan file, 75% or lower Loan-to-Value, and a competitive lender).  Rates haven’t been any lower since the first half of June 2013.

Posted by on Oct 14, 2014 in Interest Rates/Loan Limits, Market Buzz, Market Conditions | 0 comments

What’s Holding Back Buyers

This guy says there are 5-6 million people who were or could be homeowners but are on the sidelines – the buy vs. rent equation isn’t compelling enough.

She says these potential buyers don’t have the down payment and don’t know about FHA, but she might be guessing.  Though FHA is very expensive and caps out at $546,250, it’s definitely a viable option in San Diego County.  Of the 14,129 house sales this year, 1,459 of them (10%) have been financed via FHA.

Remember when we said that the market would be seasoned when we see more FHA and VA purchases…..the bidding wars would have died down, and buyers with more horsepower have passed on those deals?  Here are the percentages of FHA+VA loans used to purchase SD houses:

2011 = 35%

2012 = 31%

2013 = 25% (FHA got tougher in June, 2013)

2014 = 25%

There are more VA loans than FHA this year (59% vs 41%).

Posted by on Aug 25, 2014 in Interest Rates/Loan Limits, Jim's Take on the Market, Market Conditions, Mortgage News | 3 comments

Jumbo Rates Still Better

Last June we had the big panic due to the Fed suggesting they were thinking about possibly raising rates.  Within a month, the conforming-mortgage rates jumped from the mid-3%s to the mid-4%s.

We noted here on how the 30-year-fixed jumbo rates dropped below conforming rates, which I don’t think has ever happened before.

From June 30, 2013:

June 30 2013

A year later and the Fed says they are going to end the quantitive easing in October, and start raising rates in 2015. From the

Those projections, which Ms. Yellen noted as an indication of their recent intentions, show officials expect to raise their benchmark rate to 1% by the end of next year. Many officials have affirmed investors’ belief that the Fed won’t start rate increases until about the middle of 2015.

What happened to mortgage rates this time?

Not only was there NO panic, but rates are actually LOWER today then they were last summer – and jumbo still below conforming:

July 18 2014

While the real estate market feels like it is heading for an off-season malaise, there is going to be some real opportunity for buyers who stay in the game.

The motivated sellers who held out with a too-high price hoping to snag a springtime buyer are starting to realize that summer is going to be over before you know it.  August is only 2 weeks away!

If they can live with less – and some of them can – buyers could reap a double benefit of lower home price AND a 30-year-fixed jumbo rate at all-time lows.

Pay a point, and borrow $1,000,000 with a jumbo fixed rate in the high-3%s!

Work with Jim the Realtor:

Posted by on Jul 19, 2014 in Interest Rates/Loan Limits, Jim's Take on the Market, Market Conditions | 0 comments