Yesterday our team had another phenomenal day. Beginning with farming.....ending with our premier introductory "auction" showings it would take me a long time to outline everyone's contribution....suffice it to say our cumulative contributions are re-shaping our own success....the June 27th inaugural "Mike Kelly Team/ Menish Nelson Auction"....the first auction is a "sell-out" event.....now we start working on Sunday the 28th.....congratulations to the entire team......
One thing to add in discussing with sellers.... "financing" is getting more expensive......we all know what this means if the trend continues...the time for action.....and ‘auction' is upon us....
O.C. mortgage rates above 5% and climbing
May 27th, 2009, 1:25 pm · 14 Comments · posted by Mathew Padilla, Reporter
(Update: Fixed-rate mortgages dominate purchase market.)
Brokers say rates on fixed-rate mortgages in Orange County jumped above 5% today, as investors see the economic downturn easing and worries turn to inflation. Higher rates could postpone a housing recovery, brokers say.
However, brokers expect the Federal Reserve to buy more mortgage bonds and Treasuries to try and muscle rates back below 5%.
Al Hensling (pictured), head of United American Mortgage in Irvine, said rates on a fixed loan up to the prior conforming limit of $417,000 are as high as 5.25%, up from less than 5% last week. Consumers can pay a one-point fee and get 4.875%, he said.
Conforming loans are eligible for sale to Fannie Mae and Freddie Mac. They used to buy loans up to $417,000, but Congress and the Obama Administration increased the limit to nearly $730,000, though rates are generally 0.25% higher on loans above $417,000 and up to the new limit.
Hensling said, "The greatest fear is that just as the housing recovery starts to take hold, we see interest rates rise dramatically. That's going to put a big squash on it."
But he expects the Federal Reserve to increase purchases of mortgage bonds and Treasuries to push down yields, which have climbed over the past few days.
On March 18, the Fed said it would increase its planned purchases of Fannie and Freddie's mortgage bonds by $750 billion, to as much as $1.25 trillion, and also buy Treasuries. The yield on a 10-year Treasury fell to under 2.6% in March but has rebounded to 3.7% today.
Jeff Altman, a partner with WestCal Mortgage Corp. in Orange, said earlier today rates jumped to 5% and then climbed again to 5.125%. Around noon he continued to see lenders adjusting their rate demands higher.
"I haven't seen one day like this in a long time with most (mortgage) investors having one, two or even three mid-day price changes for the worse," Altman said. "Usually they do one a day (if at all)."
Update: Fellow blogger Jon Lansner recently posted, "According to DataQuick, 2.5% of Orange County home purchases financed in April had variable-rate mortgages of some sort. It's the 5th consecutive months where the adjustable share was under 3%. Compare that to the 4 years ending in the summer of 2007 when every month adjustable-rate financings were involved in more than half of all purchases. Some months, ARM use exceeded 80 percent of all financings!" I also added Lansner's chart on adjustable-rate loan market share.
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