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Mortgage Rate Hike for the 6th Straight Week!

My, my... when will it end?

Because of economic growth and investors realizing that the Feds aren't planning any interest rate cuts anytime soon, rates are now the highest it has been in 10 months. Additionaly, Fed Chairman Ben Bernanke warned us of inflation: "Although core inflation seems likely to moderate gradually over time, the risks to this forecast remain to the upside."

According to a national survey of large banks, these are the average rates:

30 yr fixed @ 6.61%, 15 yr fixed at 6.33%, 5/1 ARM @ 6.52%, 1 yr ARM @ 6.17%. These are with an average of .26 points. Rates can be lowered by paying more points.

I have played the waiting game the last 2 weeks hoping for a rate decrease before locking in a clients rates. The gamble hasn't paid off for me! So if you have clients on the fence, tell them that you don't know what tomorrow brings but during the last 6 weeks the rates have gone up, not down...

Pete

Posted by Pete Castillejos - Hawaii Mortgage Loan and Refinance on 06/10/2007 05:19 AM

Comments (10)

interest rate, prequalify, mortage, loan officer

10 Comments on Mortgage Rate Hike for the 6th Straight Week!

JUN

2007

I think the rates will drift into the 7's and stay there for quite awhile.

What made you think the rates wold drop? I only ask because they have been sooooo low for sooooooo long.

Hi Pete

I really appreciate your effort to keep the Activerain community informed and up to date.

Nalliah Thayabharan

Commercial and Residential Building Inspector

Expert Building Inspections Ltd

Pete, I would think with the high cost of energy, there is a fair chance of inflation returning. Fuel figures into the cost of everything from food to airline tickets. The expectation of higher costs means the dollar is weakened and will buy less. That leads to higher interest rates, as lenders seek to make up the projected loss of buying power of their money, plus figure in a profit.

I unfortunatly have to agree with Rob, I feel that rates are going to get a lot higher before they come back down. This past Thursday when their was some rallying in the market, the next day I saw some reduction in pricing (only about .125 in pricing), but that wasn't with every lender. I can hold my breath and cross my fingers and PRAY they fed get's off their A$$E$ and lowers them SOON.

If you add increasing interest rates with what's happening in the housing market right now... it doesn't paint a pretty picture.

The only good I notice about the rates climbing is that buyers are now actually buying because they are afraid that rates will go higher. It is bad to say, but it helped the slump the market was in recently. Great post

Pete,

6.61% for a 30 year lone is still one heck of a deal.....we could be at 9.95% for a 30 year and we will all be goign into schock! But we havebeen there before.

Things cpould be better, but could also be alot worse.

Rob & Doug - In the past when watching rates I would notice that went it went up it, would come back down and level off. I guess I was optimistic in waiting but you are both right, it doesn't paint a pretty picture.

Nalliah - No problem

Brian- You're right, energy costs should play a factor. Thank you for sharing.

Open Home Mortgage -I agree, that's why I started telling my clients that I can't predict tomorrow, but according to the trend maybe it's time to lock in!

Gary, Robert - Yes, rates used to be in the double-digits, right?! We were spoiled the last few years but should still be grateful for where it is now... for now!!

I only posed the question because , I remember 13% interest rates..... (yes, I remember Jimmy carter),, remember in 1997 locking in at 8% ish, and getting 7% ish......

..thinking NO WAY will rates drop enough to re-fi........then they went into the 5%ish range and I certainly could and did re-fi........

But OVERALL.....unless you just got into Real estate in the past 3-5 years....... 7% was and is a great rate for a buyer......

...NO???????

(Just asking...... I have not been following the trends intimately for the past 10 years....... but isn't 7.5% for example, a good rate?)

JUN

2007

Rob - Yes, I agree 7% is great compared rates previous to 9/11. I do like to stress to clients that we have been spoiled the last 3-5 years, like you said, and even through the rates have climbed they are still good. And now is a good time to buy IF the trend continues to go up, and GREAT time to refi if they have adjustable rate mortgages.

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