Mickey Carlton's Mortgage Interest Rate Update for 03/11/08:
Mortgage interest rates have experienced a very volatile week. The primary features have been a dangerous divergence between treasury bond prices and mortgage-backed securities prices, a weak jobless number last Friday and a mammoth attempt on the part of the Federal Reserve (this morning) to add liquidity to the markets. The end result is a rather turbulent interest rate situation that is somewhat worse than last week. Buyers can expect to pay between 6.25% and 6.75% for conforming (<$417K) 30 year fixed rate mortgages without discount points or origination fees. A borrower's individual rate will depend upon his or her loan amount, purpose and creditworthiness.
Observers ask, "what's going on in the mortgage market?". The quick answer is that we have many sellers and few buyers. Large investors (corporations, pension funds, insurance companies, college fund trustees, etc.) have refused to purchase mortgage backed securities because of the recent "bad" news relating to mortgage debt. Holders of mortgages (companies like Thornberg Mtg and Carlyle Funding) have been aggressive sellers in the secondary market. The result has been mostly bad news for borrowers.
The good news is that we remain in a range between six and seven percent which is exactly where we have been for the last two to three years. Historically, an observer, glancing at a chart of interest rates, would remark that "it must be a pretty quiet time in the mortgage business". In spite of all the volatility, we are still offering rates that borrowers would have killed to obtain just a few years ago.
Mortgage interest rates have experienced a very volatile week. The primary features have been a dangerous divergence between treasury bond prices and mortgage-backed securities prices, a weak jobless number last Friday and a mammoth attempt on the part of the Federal Reserve (this morning) to add liquidity to the markets. The end result is a rather turbulent interest rate situation that is somewhat worse than last week. Buyers can expect to pay between 6.25% and 6.75% for conforming (<$417K) 30 year fixed rate mortgages without discount points or origination fees. A borrower's individual rate will depend upon his or her loan amount, purpose and creditworthiness.
Observers ask, "what's going on in the mortgage market?". The quick answer is that we have many sellers and few buyers. Large investors (corporations, pension funds, insurance companies, college fund trustees, etc.) have refused to purchase mortgage backed securities because of the recent "bad" news relating to mortgage debt. Holders of mortgages (companies like Thornberg Mtg and Carlyle Funding) have been aggressive sellers in the secondary market. The result has been mostly bad news for borrowers.
The good news is that we remain in a range between six and seven percent which is exactly where we have been for the last two to three years. Historically, an observer, glancing at a chart of interest rates, would remark that "it must be a pretty quiet time in the mortgage business". In spite of all the volatility, we are still offering rates that borrowers would have killed to obtain just a few years ago.
Any questions? Write me at audrey@audreybutlerhomes.com
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