Wednesday, May 29, 2013

What's Happened to Mortgage Interest Rates the Last Three Weeks?

Rates have worsened considerably over the last three weeks. The best execution for 30-yr. mortgages clearly point to 3.5s, which means that rates have definitely moved to 3.75%-4.00%, or even higher depending on loan level price adjustments, and those setting prices are having to deal with companies sacrificing margin on the behalf of keeping loans coming in the door. And those with loans scheduled to fund this week are making sure they do - no one wants to try to extend when their rate lock is three points worse than the current market. The good news, although it is a little hard to focus on right now, is that rates have moved higher in reaction to the continued good economic news coming from various sources, not the least of which is housing and jobs - and no inflation. That may change, but if more borrowers qualify, or fewer homes are underwater, that is not a bad thing.

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