How low can we go? 30 yr fixed at 3.75% with no fees...

NEW -> Contingent Buyer Assistance Program
It must be the supply shortage!!

Mortgage demand drops to a 22-year low as higher interest rates and inflation crush homebuyers

The pain in the mortgage market is only getting worse as higher interest rates and inflation hammer American consumers.

Mortgage demand fell more than 6% last week compared with the previous week, hitting the lowest level since 2000, according to the Mortgage Bankers Association?s seasonally adjusted index.

Applications for a mortgage to purchase a home dropped 7% for the week and were 19% lower than the same week in 2021.
https://www.cnbc.com/2022/07/20/mortgage-demand-drops-to-lowest-level-in-22-years.html
 
The 10-year bond rate is back down to 2.75% and show a head-n-showers formation which may mean that the rate may head back to 2.50%.  Not sure where the MBS market is, but I got a few emails from lenders that they are back to around 4% for a 30-year fixed jumbo loan with no points.  The higher the Fed raises rates the more the yield curve will invert with lower long term bond rates go.  I'll look to refi into a 3.50% 30-year fixed or 10 year ARM jumbo loan this year or next year.
 
USCTrojanCPA said:
The 10-year bond rate is back down to 2.75% and show a head-n-showers formation which may mean that the rate may head back to 2.50%.  Not sure where the MBS market is, but I got a few emails from lenders that they are back to around 4% for a 30-year fixed jumbo loan with no points.  The higher the Fed raises rates the more the yield curve will invert with lower long term bond rates go.  I'll look to refi into a 3.50% 30-year fixed or 10 year ARM jumbo loan this year or next year.
Click to expand...
My daughter has a 4% loan (just closed in May). Unless it's no cost not sure it makes a huge difference for her since she is a few 100K under jumbo loans but I told her to get a mortgage broker and have her papers ready in case they fall one day bigly.

If the 10 year breaks 270 it could head back to 200. Not sure if it's because inflation is tamed or economy is just going to be that bad or both. Gas is $4.28 here now. So same thing....... why is that? Economy is just headed downhill??? In any case, looks like rates are done going up.
 
A portion of this rate move is artificial and may not last very long. There are two significant sources of broker funds today - Rocket Mortgage and UWM. UWM is run by a pretty innovative guy, Matt Ishbia, who took Ray Croc's advice - " If I see my competition drowning, I'd shove a hose down their throat and turn on the water...." 

An article from June 2022, but still the main reason for what's going on. UWM is doing their best to drown the competition.  It's not sustainable, as anyone burning cash like that has only so much of it to set alight.  Rocket is going to follow suit, as will loanDepot and other wholesale companies until all that's left is ash, and perhaps 1-2 survivors.
https://www.housingwire.com/article...opped rates by 50,maximum of 40 basis points.


So where are mortgage rates REALLY headed? No one knows, and the Fed is still going to throw another .75 rate hike on the bonfire soon. Here's the link to Freddie Mac's weekly rate survey. As of 7/18 the average standard conforming closed loan rate was 5.54 at a cost of about .80 in fees. Although this was from 7/18, it's really from 7/1 because the pricing is for closed loans which locked around 7/1.
https://www.freddiemac.com/pmms

Watch this site as it's reliable, then compare with what's being sold on the street level via Bankrate, Mortgage News Daily, and other comparative sites.

My ..02c
 
Ready2Downsize said:
USCTrojanCPA said:
The 10-year bond rate is back down to 2.75% and show a head-n-showers formation which may mean that the rate may head back to 2.50%.  Not sure where the MBS market is, but I got a few emails from lenders that they are back to around 4% for a 30-year fixed jumbo loan with no points.  The higher the Fed raises rates the more the yield curve will invert with lower long term bond rates go.  I'll look to refi into a 3.50% 30-year fixed or 10 year ARM jumbo loan this year or next year.
Click to expand...
My daughter has a 4% loan (just closed in May). Unless it's no cost not sure it makes a huge difference for her since she is a few 100K under jumbo loans but I told her to get a mortgage broker and have her papers ready in case they fall one day bigly.

If the 10 year breaks 270 it could head back to 200. Not sure if it's because inflation is tamed or economy is just going to be that bad or both. Gas is $4.28 here now. So same thing....... why is that? Economy is just headed downhill??? In any case, looks like rates are done going up.
Click to expand...

Yeah, the technicals look like bond rates are heading lower but it's no surprise given that economic indicators are pointing to a material slowdown.  I think if the Fed raises rates 100bps next week and/or CPI inflation starts rolling over I can see the 10-year bond rates come down to around 2.50% in the short term.
 
Soylent Green Is People said:
A portion of this rate move is artificial and may not last very long. There are two significant sources of broker funds today - Rocket Mortgage and UWM. UWM is run by a pretty innovative guy, Matt Ishbia, who took Ray Croc's advice - " If I see my competition drowning, I'd shove a hose down their throat and turn on the water...." 

An article from June 2022, but still the main reason for what's going on. UWM is doing their best to drown the competition.  It's not sustainable, as anyone burning cash like that has only so much of it to set alight.  Rocket is going to follow suit, as will loanDepot and other wholesale companies until all that's left is ash, and perhaps 1-2 survivors.
https://www.housingwire.com/article...opped rates by 50,maximum of 40 basis points.


So where are mortgage rates REALLY headed? No one knows, and the Fed is still going to throw another .75 rate hike on the bonfire soon. Here's the link to Freddie Mac's weekly rate survey. As of 7/18 the average standard conforming closed loan rate was 5.54 at a cost of about .80 in fees. Although this was from 7/18, it's really from 7/1 because the pricing is for closed loans which locked around 7/1.
https://www.freddiemac.com/pmms

Watch this site as it's reliable, then compare with what's being sold on the street level via Bankrate, Mortgage News Daily, and other comparative sites.

My ..02c
Click to expand...

That's why I told my daughter to get your papers in and be ready in case it's just a pop lower for a day or two.

Being in the area for so long, something that has been uncanny is Tustin's ability to lolligag and manage to finally get things built at market tops, completely missing the upside and ending up with homes sitting. Happened in 1989 (tustin ranch), 2000's (columbus square), 2016 (kind of flatish market, Legacy) and now with the Landing.
 
So the key message/leading indicator is if Tustin is building, the market is about to reach its peak and come down. Sounds true but not sure it applies to Greenwood. Anybody who bought I. Greenwood in 2016 did very well. If I remember correctly the Stanford homes, which  the biggest homes were going for 1,275,000 to high 1,300,000?s
 
USCTrojanCPA said:
Ready2Downsize said:
USCTrojanCPA said:
The 10-year bond rate is back down to 2.75% and show a head-n-showers formation which may mean that the rate may head back to 2.50%.  Not sure where the MBS market is, but I got a few emails from lenders that they are back to around 4% for a 30-year fixed jumbo loan with no points.  The higher the Fed raises rates the more the yield curve will invert with lower long term bond rates go.  I'll look to refi into a 3.50% 30-year fixed or 10 year ARM jumbo loan this year or next year.
Click to expand...
My daughter has a 4% loan (just closed in May). Unless it's no cost not sure it makes a huge difference for her since she is a few 100K under jumbo loans but I told her to get a mortgage broker and have her papers ready in case they fall one day bigly.

If the 10 year breaks 270 it could head back to 200. Not sure if it's because inflation is tamed or economy is just going to be that bad or both. Gas is $4.28 here now. So same thing....... why is that? Economy is just headed downhill??? In any case, looks like rates are done going up.
Click to expand...

Yeah, the technicals look like bond rates are heading lower but it's no surprise given that economic indicators are pointing to a material slowdown.  I think if the Fed raises rates 100bps next week and/or CPI inflation starts rolling over I can see the 10-year bond rates come down to around 2.50% in the short term.
Click to expand...

Bond rates continue to drift lower and we are now down to 2.65% and I still think we head to around 2.50% in the short term.  And it's not only the US that has lower bond yields, the same thing is happening in all of Europe.  Bond investors are pricing in a recession with lower longer term inflation expectations. 
 
Well, this thread is dead....

mortgage-rates
 
I still don't think we are going to hit double digit rates for mortgages.

They were supposed to head that way during the Aught's "crash" which was supposed to cause a "tsunami" of O-Arm resets... but we all know how that turned out.
 
Just got this email from Better:

Rates have been rising, so we created a whole new way for your clients to buy a home with confidence. Here’s how it works:

Buy today. Refi for free later.*

So if rates drop in the next 3 years and your clients refinance with us, we’ll cover their owner and lender title policy fees, appraisal fees, flood certification fees, and credit report fees, and other settlement fees. That's in addition to:

$0 lender’s fees
$0 commissions


If you're interested, click here to learn more.
 
People are used to low rates so companies will get creative.

I heard an ad where they said they will buy down the interest rate 1% for 1 year for free.

ARMs will be prime time again. :)
 
A 1.0 buydown for 12 months is gimmickry at best. It's asking some to close at 6% rate in a 5.75 market (approximately speaking). Someone is paying for that buydown and it's never the lender....

Unfortunately ARM loans this go around won't be the answer. ARM products are adversely impacted faster by the upward rate momentum caused by the Fed as compared to a Fixed rate. The spreads on start rates are anywhere from .25 to .75 between an ARM and a Fixed loan - a nice gap to save $$$. Qualifying for the ARM however is at a higher rate than the Fixed rate loan because the index and margin combined is well above the ARM and the Fixed rate.
 
irvinehomeowner said:
I still don't think we are going to hit double digit rates for mortgages.

They were supposed to head that way during the Aught's "crash" which was supposed to cause a "tsunami" of O-Arm resets... but we all know how that turned out.
Click to expand...
Uh, yeah... There was a "tsunami" of O-Arm resets. Lots of foreclosures and short sales resulted... as you well know, from your participation on IHB.
 
Liar Loan said:
Uh, yeah... There was a "tsunami" of O-Arm resets. Lots of foreclosures and short sales resulted... as you well know, from your participation on IHB.
Click to expand...
There was no tsunami... I think even Larry admitted that gov intervention prevented it.

There should have been quite a bit more... IHB even detailed the data I found on ForeclosureRadar that just showed can kicking.

Instead... interest rates dropped so low, those minimum O-Arm payments were paying principal + interest.

You're talking from either ignorance or wishful schadenfreude... that's why Larry couldn't keep doing those articles and had to expand out of Irvine. The tsunami just didn't happen.
 
The O-Arm resets happened regardless of government intervention. You said there was no tsunami of O-Arm resets, but there was, as you later confirm in your third paragraph. The amortizing payments were minuscule in comparison to the loss of equity occurring each month.

You must have meant there was no tsunami of foreclosures, but there was still an unprecedented number of foreclosures, short sales, loan modifications, and jingle mail. Government intervention blunted the impact by spreading it out over many years (kicking the can), but despite that, Irvine still lost 28% of its value!!!

You're more of an expert on Larry than I am. I wasn't there when he made the decision to expand his scope. What I do know, is that anybody that listened to his advice to avoid buying in 2007 and later jumped into the market in 2012 when he said it had bottomed, did pretty well for themselves. Why you don't give him credit for that I don't know... maybe due to ignorance or wishful schadenfreude?
 
You must log in or register to reply here.
Back
Top