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Category Archive: ‘Interest Rates/Loan Limits’

Mortgage Rates Dropping

rates sept 27

Are you still thinking about packing it in for 2016?

Mortgage Rates maintained their recent winning streak today, falling for the 5th straight day.  The average lender is now offering the best rates in nearly 2 months.  You’d have to go back early August or late July (depending on the lender) to see a better combination of rate and upfront cost.

Read more here:

Posted by on Sep 27, 2016 in Interest Rates/Loan Limits, Jim's Take on the Market, Market Conditions | 0 comments

Rates Are Steady


Janet Yellen has spoken today – but no big shocks:

The possibility of a December hike, around 50 percent before Yellen’s remarks, moved up to 53.5 percent, according to the CME. However, the market continues to doubt anything happening in September, which has just an 18 percent chance.

“Ultimately we think Yellen’s speech really doesn’t give us anything new,” said Chris Gaffney, president of World Markets at EverBank. “They continue to be data dependent and the members still ‘believe’ growth will return in the coming months — but the data continue to prove them wrong so the Fed’s credibility continues to come into question.”

Even if/when the Fed bumps their Fed funds rate, I’m not sure it would change mortgage rates much.

Posted by on Aug 26, 2016 in Interest Rates/Loan Limits, Jim's Take on the Market | 2 comments

Brexit Impact on Real Estate

June 27 rates

How is the Brexit going to impact the sales of real estate?

From MND:

There’s no telling how long this “initial reaction” period will continue and what the longer term effects will be, but for now, the short term effects have been strongly positive for rates.  The most prevalent conventional 30yr fixed quote is still 3.5% on top tier scenarios, but 3.375% gained a lot of ground today.  With just a bit more improvement, the average lender would be at 3.375% for the first time since early 2013.  This is also the lowest stably-maintained rate we’ve ever recorded (there were scattered instances of 3.25% back in 2012).

The Brexit will be great for mortgage rates, and we could – and should – see the lowest rates yet.  The 10-year closed today at 1.4377%, and we add 1.75% to it to find the target for 30-year conforming rates (3.18%).

Lenders are like gasoline companies, and reduce their rate slowly on the way down.  Hopefully, by the end of the week, we could see the 30-year mortgages being quoted around 3.25%!

But home buyers are concerned about overpaying, so lower rates will just keep them optimistic – they won’t make them want to pay more for a house!

There will be more turbulence, but never as a society have we had such teflon memories. We just swipe it all away!

Posted by on Jun 27, 2016 in Interest Rates/Loan Limits, Jim's Take on the Market, Thinking of Buying? | 1 comment

Favorable Mortgage Rates Continue


Anyone who thought that the threat of higher mortgage rates would cause buyers to rush their home-buying decision can chillax, as Kayla would say.  The threat has subsided, making buyers even more comfortable and deliberate in their search for the perfect match. These guys quote rates with no points:

Mortgage rates were sideways to slightly lower today, keeping them in line with the lowest levels in more than three years.

While there are a few aggressive lenders quoting 3.5% on conventional 30yr fixed loans, 3.625% is the most prevalent quote on top tier scenarios.  3.75% had been more common until last week’s jobs report sent rates quickly lower, and all but eliminated the possibility of a Fed rate hike in June.  The Fed Funds Rate does not directly dictate mortgage rates, but increasing expectations for Fed rate hikes tend to coincide with increasing mortgage rates.

When rates have been near these 3-year lows, we’ve only seen them dip lower briefly–and usually not by that much.   That means locking is never a bad idea at current levels.  Even so, risk-takers could also find justification to float based on the hope that European markets continue to pull US interest rates lower as the European Central Bank (ECB) begins a new bond-buying program tomorrow.  As always, if you choose to float, set a limit as to how much rates would have to rise before you’d lock to avoid further losses.

“I continue to favor floating all loans right now.   The benchmark European bond, the 10yr Bund, set new record lows today ahead of the ECB corporate bond buying which is set to begin tomorrow.  I think it is worth the risk to float overnight to see how that impacts the Bund which will have an impact on US Treasuries.  Today, the Bund helped push the 10 year to about a 1month low.”  – Victor Burek, Churchill Mortgage

Posted by on Jun 8, 2016 in Interest Rates/Loan Limits, Jim's Take on the Market | 4 comments

New-Home Sales Rise

If this sort of good news holds up, look forward to the Fed bumping their rate again. Mortgage rates have come down since the last Fed hike!

From MND:

New home sales surged in April after a disappointing report in March.  The Census Bureau and the Department of Housing and Urban Development said today that sales were at a seasonally adjusted annual rate of 619,000, an increase of 16.6 percent from the previous month and 23.8 percent higher than in April 2015.  That said, it should be noted that this report has a notoriously high margin of error, with this month’s ringing in at 15.4 percent.

Sales in March were also higher than earlier reported.  Last month’s report had those sales down from February by 1.5 percent to a seasonally an annual rate of 511,000.  That number

On a non-seasonally adjusted basis there were 61,000 newly adjusted homes sold during the month.  In March sales totaled 50,000.

At the end of the reporting period there were an estimated 243,000 new homes for sale nationwide.  This is estimated at a 4.7-month supply at the current rate of sales, down from 5.5-months in March.

The median price of a new home sold in April was $321,100 compared to $292,700 a year earlier.  The average sales price was $379,800 compared to $334,700 in April 2015.

The Mortgage Bankers Association, based on the numbers of applications submitted to the mortgage subsidiaries of new home builders, had predicted sales to decline 11 percent from March.  On a non-seasonally adjusted basis they had projected sales at 48,000 units, down from 54,000 units in March.

Sales in the Northeast were up 52.8 percent from March and an astounding 323.1 percent from the previous year. Sales in the Midwest declined by 4.8 percent and 9.1 percent from the two earlier periods.

Sales of new homes in the South rose 15.8 percent from March and 18.1 percent year-over-year.  The West saw sales increase by 18.8 percent month-over-month and 23.6 percent for the year.

Posted by on May 24, 2016 in Builders, Interest Rates/Loan Limits, Jim's Take on the Market | 1 comment

Lowest Rates in Three Years


As of (yesterday), you’d have to go back 3 full years to see rate sheets any lower, on average.

May 10th, 2013 was a very bumpy day for rates, and it capped a week that served as the starting point for the ‘taper tantrum’ (several months of rapidly increasing rates as markets adjusted to the idea that the Fed would be ending its bond buying program).

With a range of 3.5 to 3.625% (at no points), today’s top tier conventional 30yr fixed quotes are right in line with those seen on May 9, 2013.

Posted by on May 11, 2016 in Interest Rates/Loan Limits, Jim's Take on the Market | 0 comments

Lower Mortgage Rates


Mortgage rates sure are cooperating with the peak selling season!  Let’s hope the economy stays alive, and the political circus doesn’t get any worse.

From MND who quotes rates with zero-points:

Part of the recent move lower in rates is due to anticipation of just such a “sell stocks, buy bonds” trend–just like the one seen in the first 6 weeks of 2016.  If stocks actually do move significantly lower, it’s highly likely that rates would follow.  Even now, rates are already very close to the lowest levels in 3 years.  In fact, since mid-May 2013, we’ve only seen rates any lower than today 2-3 times, depending on the lender.  As for particulars, the most aggressive lenders are back to quoting 3.5% on top tier conventional 30yr fixed scenarios, with the bulk being at 3.625%.

Let’s also note what appears to be the new trend of seller euphoria that kicks off the spring selling season now:


Posted by on Apr 6, 2016 in Interest Rates/Loan Limits, Jim's Take on the Market, Spring Kick | 1 comment

Inventory Watch


We survived the Fed hike.

Last Monday, the 30Y rate was 3.98%.  The Fed made it official on Wednesday, and the 30Y rate initially jumped about 20 basis points.  But by Friday afternoon we were back down to 4.02%.

This guy thinks the Fed move was a mistake:

The local NSDCC new listings keep coming; 51 in the last seven days which is about the same as in 2013.  With Christmas being so close, you might think that the bulk of those are just listings being ‘refreshed’.

But only 11 of the 51 had expired or cancelled within the last 30 days, and then relisted by the same agent over the last week.

We’ll see a boatload of ‘refreshings’ during the first week of 2016 – watch out.

Click on the link below for the complete NSDCC active-inventory data:

Read More

Posted by on Dec 21, 2015 in Interest Rates/Loan Limits, Inventory, Jim's Take on the Market, Listing Agent Practices | 0 comments

Mortgage Rates and the Fed


The Fed made their move….finally!  Here’s a good explanation from MND:

Mortgage rates moved just slightly lower today, despite the long-awaited Fed rate hike.  Once again, that’s LOWER mortgage rates and a HIGHER Fed rate.  Here’s how that works:

The rate that moved higher today is the Federal Reserve’s Target Rate.  This is the rate banks charge other banks to borrow money overnight.  It’s called the Fed’s Target Rate, because the Fed doesn’t actually directly enforce the rate.  It merely “targets” the rate (or the range of rates, in this case) that it believes is in line with its policy goals.  The Fed can then employ several tools to influence the overnight rate and bring it in line with the target range.

If you’re not already well-versed in the reasons that banks borrow from other banks overnight, don’t worry about that.  All you need to know is that the Fed’s target rate is vastly important to the global financial system, and it has far-reaching effects on all manner of interest rates.

In other words, a Fed rate hike is a big deal, but bigger to some than others.  Mortgage rates are less directly connected to the Fed’s Target Rate, as could be easily seen in today’s modest move lower.  The Fed hiked its rate by a quarter of a point–an amount that would be unimaginably severe in the mortgage world.  Such a move has only happened a few times in history on a single day.

The caveat is that mortgage rate movement is given plenty of time to roam free, day in and day out.  Meanwhile, the Fed rate only moves when the Fed announces it, which is almost always at one of their meetings.  Those only happen 8 times a year.  In other words, mortgage rates have had time to do whatever they needed to do to get ready for today’s Fed rate hike.  The bottom line is that mortgage rates do, in fact, care about the Fed rate to some extent.  They’re simply not joined at the hip.

In terms of specifics, today’s mortgage rate movement was very small.  Most lenders continue to quote 4.0-4.125% on top tier conventional 30yr fixed scenarios.

Read more here for rate-lock advice:

Posted by on Dec 17, 2015 in Interest Rates/Loan Limits, Jim's Take on the Market | 2 comments

Inventory Watch


Lately, the number of weekly new pendings has been higher than last year, and a little under those in 2013 – I’ll take it.

All eyes will be on the Fed’s likely bump of the fed-funds rate on Wednesday, but it should already be priced into the current mortgage rates.  We might see mortgage rates drop later this week – current 30Y rate is 3.98%.

Click on the link below for the complete NSDCC active-inventory data:

Read More

Posted by on Dec 14, 2015 in Interest Rates/Loan Limits, Inventory, Jim's Take on the Market | 0 comments