Hey all, so you've probably heard mortgage rates are on the rise. Well, that's not the half of it. Rates are in fact, TANKING. On 11/3 we all had moments of euphoria when borrowers could get a sub 4% interest rate at no points. Today, well... try about 5%. Check out the graph here ((thanks to my friends at mortgagemarketguide.com)). It is going to show you that bond prices are tumbling out of control. Bond prices go down, rates go up. What we have seen since 11/3 is a series of econmic reports, as well as a statement from our Fed friend, Thomas Hoenig saying that "the US economy is recovering remarkably well..." which didn't help the bond market. Money has been flushing out of bonds and into stocks for a while now. Nobody sees and end in sight to this Cinderella story stock market turn around and it seems everyone is jumping into said market head first to not miss there chance at getting tickets to the ball.
Here is aforementioned ugly graph. However, on a very positive note, we do expect rates to stay in the 5.25 to 5.5 range which is VERY VERY good. 2011 should be a GREAT year for purchases and now maybe all these lender pipelines will be flushed of refinances that are clogging a realtor's ability to close a loan easily these days. :)
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