San Francisco, CA: On March 13th and 14th we saw huge rate increases. Our beloved 3.875% “Best Execution” went to 4.125% with most lenders. In fact over the past two days we have seen a dramatic increase in rates –
For those that want to know WHY rates moved higher so quickly:
I Refer to Matthew Graham of Mortgage News Daily -
“(NOTE: For most of this discussion, we'll actually reference 10yr Treasury yields, even though it is Mortgage-Backed-Securities (MBS), that most directly influence lender's rate sheets. When markets are undergoing bigger shifts than they've recently seen, 10yr Treasuries are a better indicator to measure the progress and severity of those shifts. We'll ALWAYS make note of any major discrepancies between MBS and Treasuries on the occasions where we talk about both.)
There are several layers of causality. We discussed the "perfect storm" of events that drove rates higher yesterday. That discussion included Greece's recently fully-approved 2nd bailout, a slightly more upbeat FOMC Announcement, slightly stronger Retail Sales, and the general trading dynamics that left bond markets "susceptible" to the weakness.
Yesterday, we talked about that susceptibility as leaving room to run up to about 2.13% in terms of 10yr yields. Today's rout was the next destination in that technical framework. What begins as a test of higher-than-recent interest rates can quickly turn into a brutal disintegration if certain dominoes fall. Without attempting to explain every esoteric concept of the underlying markets, suffice it to say that between yesterday and today, some very big dominoes started falling, and we're not sure if they're done yet.”
Rates are still phenomenal so if you haven’t locked in on your refinance I don’t think you missed out on anything…you were just waiting for the bottom, and when you wait for the bottom it is very easy to miss the bottom. That being said, it is of course very possible to see rates go even lower. We are still near historic lows!
For more information please feel free to comment, call 510.282.5456 or email email@example.com.