{"id":6014,"date":"2008-12-10T14:34:52","date_gmt":"2008-12-10T21:34:52","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=6014"},"modified":"2008-12-10T14:34:52","modified_gmt":"2008-12-10T21:34:52","slug":"why-wont-mortgage-rates-drop-below-5","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/6014\/why-wont-mortgage-rates-drop-below-5\/","title":{"rendered":"Why Won’t Mortgage Rates Drop Below 5% ?"},"content":{"rendered":"

Mortgage-backed securities have been on a tear, improving more than a half a point in the last week<\/a>.\u00a0 This means that the 5.25% rate, offered at 1 point last Friday, should be offered at a half a point today….BUT….<\/p>\n

…that isn’t the case at all.\u00a0 Mortgage rates may very well rise while the mortgage-backed securities market improves.\u00a0 I told you that the only relevant indicator of mortgage rates is the mortgage-backed securities market<\/a>.\u00a0 Why would I reverse my position?<\/strong><\/p>\n

This conundrum is a Freshman year Macroeconomics 101 case study; supply and demand.\u00a0 Rates have improved since the Fed hinted at a 4.5% world.\u00a0 Demand has risen, for mortgage money.\u00a0 Lenders have cut back their workforce<\/a> or disappeared altogether<\/a>.\u00a0 There just ain’t enough folks to process the paperwork so “supply” is down.<\/p>\n

Lenders are making it clear that they just hate refinance transactions, because of nebulous valuations, in their pricing.\u00a0 Expect refinance transactions to become even more expensive, in 2009. <\/strong> What this means is that your soon-to-be-neighbor , who is buying a home with a 3% down payment, may very well get a 5.25% rate while you, who has more equity (in a similar home), may be offered 5.75% for a refinance.<\/p>\n

Lenders won’t get fooled into believing that business will pick up next year so they won’t be adding to the workforce.\u00a0 Market volatility may encourage profiteering as long as rates stay low.<\/p>\n","protected":false},"excerpt":{"rendered":"

Mortgage-backed securities have been on a tear, improving more than a half a point in the last week.\u00a0 This means that the 5.25% rate, offered at 1 point last Friday, should be offered at a half a point today….BUT…. …that isn’t the case at all.\u00a0 Mortgage rates may very well rise while the mortgage-backed securities […]<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-6014","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-real-estate","8":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":5913,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/5913\/treasury-may-lower-mortgage-rates\/","url_meta":{"origin":6014,"position":0},"title":"Treasury\u00a0may lower mortgage rates?","author":"Tom Vanderwell","date":"December 3, 2008","format":false,"excerpt":"WASHINGTON (MarketWatch) - The Treasury Department is contemplating a proposal that would cut mortgage rates for new loans for homes, according to the Wall Street Journal. The plan would employ Fannie Mae to offer mortgages with rates as low as 4.5%, roughly 1% lower than current rates. The measure is\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3188,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3188\/mortgage-rates-higher-at-the-end-of-may\/","url_meta":{"origin":6014,"position":1},"title":"Mortgage Rates Higher at the End of May","author":"Brian Brady","date":"May 29, 2008","format":false,"excerpt":"Here's how bad it gets when the mortgage-backed securities market deteriorates: From May 21: This is a chart for the last 30 days for mortgage-backed securities.\u00a0 When MBS prices go up, mortgage rates come down.\u00a0 In this case, I noticed a meteoric rise in MBS prices in the last week\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":761,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/761\/why-the-fed-matters-to-real-estate\/","url_meta":{"origin":6014,"position":2},"title":"Why The Fed Matters to Real Estate","author":"Dan Green","date":"December 12, 2006","format":false,"excerpt":"The Federal Open Market Committee meets today and will keep the Fed Funds Rate unchanged at 5.250%. It is not what the Fed does, however, that should concern Americans. It's what the Fed says. First, a clarification. The Fed Funds Rate is directly tied to Prime rate which impacts lines\u2026","rel":"","context":"In "Enduring Interest"","block_context":{"text":"Enduring Interest","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/enduring-interest\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2796,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2796\/will-the-fed-buy-mortgage-backed-securities-in-the-open-market\/","url_meta":{"origin":6014,"position":3},"title":"Will the Fed Buy Mortgage Backed Securities In the Open Market?","author":"Brian Brady","date":"March 18, 2008","format":false,"excerpt":"I never post my Mortgage Rates Reports here.\u00a0 They're boring unless you are thinking about buying a home or refinancing your mortgage.\u00a0 Today, it seems plausible that the Fed is shifting its open market activities from buying treasuries, to buying mortgage-backed securities, in order to bolster liquidity in the mortgage\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":8627,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/8627\/lower-june-2009-mortgage-rates-rely-on-central-bank-action\/","url_meta":{"origin":6014,"position":4},"title":"Lower June, 2009 Mortgage Rates Rely On Central Bank Action","author":"Brian Brady","date":"May 28, 2009","format":false,"excerpt":"May Day in the mortgage rates market is over.\u00a0 The market got spooked by triangulated opinions about the viability of the US Treasury as a going concern.\u00a0 In response, mortgage traders sold off mortgage-backed securities, some 3-4%, in 4 days, to drive mortgage rates from 4.75%\u00a0 to the 5.375% current\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":14866,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/14866\/could-mortgage-rates-drop-after-a-treasuries-credit-ratings-downgrade\/","url_meta":{"origin":6014,"position":5},"title":"Could Mortgage Rates DROP after a Treasuries’ credit ratings downgrade?","author":"Brian Brady","date":"July 29, 2011","format":false,"excerpt":"The dictated debt limit deadline looms and a credit rating downgrade, to US Treasury securities and agency mortgage-backed securities, seems likely.\u00a0 Naturally, a spike in treasury yields is expected and a subsequent rise in mortgage rates should follow. \u00a0 That's right out of the senior year textbook, in most American\u2026","rel":"","context":"In "Big Mother"","block_context":{"text":"Big Mother","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/big-mother\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/6014","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=6014"}],"version-history":[{"count":3,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/6014\/revisions"}],"predecessor-version":[{"id":6017,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/6014\/revisions\/6017"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=6014"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=6014"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=6014"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}