What stirred our market today?

By
Mortgage and Lending with Cherry Creek Mortgage Illinois Residential Mortgage License LMB #0005759 Cherry Creek Mortgage NMLS #: 3001 NMLS ID# 158606

The Fed is making it clear that they think Mortgage Rates to consumers are too high relative to Treasures. The last time we had rates (Treasuries & MBS) this low was back in 2003-2004, when the 10Yr Treasury bottomed out (in Yield) at 3.11 on 6/13/03, and the Fannie Mae 30y 30 day commitment (FNCR3030 on Bloomberg) bottomed out @ 4.66 for a spread of 1.55.  Currently this spread is 2.53, which is 98BP wider then it was in 2003.  Many things have changed over the last few years, with the current economic and housing situation looking worse then they did in 2003.  The potential impact on mortgage rates could be tremendous.  

 Let's hope that this becomes the new mantra.  As real estate goes...so goes the United States.  Are you ready for mortgage rates to fall ?? 
 

(Data and commentary provided courtesy of Rob Branthover @ MIAC)

 

US Treasury and Fannie Mae Commitment Spreads

 

 

 

 

 

 

 

 

  

6/13/2003

10/31/2008

11/24/2008

10Yr Treasury

3.11

3.95

3.19

FNCR3030

4.66

6.30

5.72

Spread

1.55

2.35

2.53

6/03 to 11/08

  

  

0.98

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Rainmaker
122,244
Brett Tousley
Keller Williams Realty - Richland, WA
Tri Cities Real Estate | (509) 420-0013

To answer your question...YES I am ready for rates to fall!  Haven't heard my lender quote me anything that started with a 5 in quite a while.  Love it.

Nov 25, 2008 02:47 PM #1
Rainmaker
275,577
Ken Cook
Content, coding, marketing, host. - Marietta, GA
Content Marketer/Creator

The second rate drop today was nice and gave us a little more hope for the holidays. Our press here is so very negative and people eat it up. We got an after hours memo from our biggest funder and we will open tomorrow with another .125 off already great rates. Now if Fannie will just wake up and let some of these very strong investors go over that 4 property limit!

Nov 25, 2008 02:49 PM #2
Rainer
207,504
Shane OnullGorman
Eau Claire Realty, Inc. - Eau Claire, WI
Eau Claire Wisconsin, Real Estate Agent & Realtor- Buy or Sell

I wonder what will happen but hopefully its for the best.

Nov 25, 2008 02:49 PM #3
Rainmaker
1,080,029
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

This is great news to give an added incentive for the hoards of buyers sitting on the fence to jump in! Not to mention the refis that will happen.

Nov 25, 2008 03:31 PM #4
Rainmaker
120,917
Richard Sweum
1st Security Bank - Everett, WA

Larry, I pray..hope...cross my fingers...that this noodle sticks to the wall!  What I fear is that we are setting course for a massive stag-flation scenario.  I know the Roubini has been touting stag-deflation, but conditions are aligning for a late seventies evaporation of confidence in US Treasuries, and the only way that we could get lender nations back at the trough was through high interest rates.  The situation is much different, but this is one of the "side effects" that I fear could tube the boost to the MBS market.  What do I know...just a kid from Everett.

Nov 25, 2008 03:46 PM #5
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