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

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Bond yields dropping again...dipping below the 2% mark earlier today.  We're back to about where we were in late May.  Investors running back to the UST after bad news in Europe and Asia.  I don't think we will ever see it drop to 1.7% in early May but 1.8-1.9 seems realistic. 

That jobs report on Friday should interesting.  I wonder if Clarence Beeks will have the inside information.
 
Lasner wrote an interesting article in the OCReg today about rising rates and home prices.

No link because of paywall but the gist was that in the past 40 years of data on single family homes, in the 15 years when rates rose, there was average 14% price gain from the previous year compared to the 24 years when rates declined, there was an average of only 8% price gain.

Of course there are other factors involved like unemployment and state of the economy but in the numbers he looked at, they don't necessarily reflect the common notion thrown around that rising rates usually results in lower prices.

And in places like Irvine, where cash buys are high, I think rates have an even smaller impact on pricing.
 
Closing today on my Jumbo 5/1 refi, despite rates edging up recently, still can get 2.5% rate at 75%LTV from a zillow broker today with little to no fees
 
We'll see in September when tapering begins or is stalled until 2015. The "Faux-covery" will need to generate more stories about how the real economy isn't roaring back enough to support higher rates.

Want a good read about the Fed and their understanding of the real world? Try this:

http://www.ritholtz.com/blog/2013/06/job-fair-shocks-fed-governor-raskin/

which is part of the reason why I don't give the turn in rates much hope of going over 4.5%. Still a fantastic deal in a relative sense.
 
10 year treasury breaking through important resistance at 2.39%.  Yields up to 2.41% as of 12:50 p.m. EST.  Hopefully, it will stay below 2.4% so it does not breakthrough the resistance and go upwards.  I think market is overreacting and should calm down tomorrow.  Just signed contract on a new home and locking in the rate at end of Oct.  If the trend continues, I will be very unhappy person. >:D
 
Depends on how cynical you are.

Is the market being a petulant child whining about being told their candy will get cut off at Christmas or are they junkie who's being told their juice is getting cut at Christmas.

I think the market knows they're a junkie.
 
Goriot said:
10 year treasury breaking through important resistance at 2.39%.  Yields up to 2.41% as of 12:50 p.m. EST.  Hopefully, it will stay below 2.4% so it does not breakthrough the resistance and go upwards.  I think market is overreacting and should calm down tomorrow.  Just signed contract on a new home and locking in the rate at end of Oct.  If the trend continues, I will be very unhappy person. >:D
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I am about 45 days away from closing...kicking myself for not locking in at 60 days and 4.2 but there was a .4 % spread between the 30 and 60 days.  Thinking about locking at 45 days.

I have never cared about bonds yields so much in my life.
 
I think this thread has finally answered the title question: "How low can we go...". Roughly 3.0% Conforming 30 with some costs, 3.375% Jumbo conforming with costs.

10 year T is at 2.50 and that's probably where it will float for a while. Watch Mortgage Backed Securities at www.mortgagenewsdaily.com. That's a better picture of where rates are going.

Expect to see most of the refi jockey's (Greenlight/Cash Call) suddenly remake themselves as purchase loan specialists and try to conquer that market or rotate into ARM products to stay afloat. For those waiting for their home to be built, the question is "Should I try an ARM?" A sub 4% 7/1 ARM is still a pretty strong alternative to 30 fixes that are going to stay in the 4's for a while.

I was told that a national wholesale lender my company competes with (one in which with thousands of brokers are sending them business) this Tuesday booked a grand total of 7 new loans. The usual number is in the mid 300's. Plenty of people in the business are going to get bounced out pretty soon. As one person put it, if your lending shop exist only as a result of the support to the market given by the Federal Reserve, it's past the time to rethink that model.

My .02c
 
Soylent Green Is People said:
I think this thread has finally answered the title question: "How low can we go...". Roughly 3.0% Conforming 30 with some costs, 3.375% Jumbo conforming with costs.

10 year T is at 2.50 and that's probably where it will float for a while. Watch Mortgage Backed Securities at www.mortgagenewsdaily.com. That's a better picture of where rates are going.

Expect to see most of the refi jockey's (Greenlight/Cash Call) suddenly remake themselves as purchase loan specialists and try to conquer that market or rotate into ARM products to stay afloat. For those waiting for their home to be built, the question is "Should I try an ARM?" A sub 4% 7/1 ARM is still a pretty strong alternative to 30 fixes that are going to stay in the 4's for a while.

I was told that a national wholesale lender my company competes with (one in which with thousands of brokers are sending them business) this Tuesday booked a grand total of 7 new loans. The usual number is in the mid 300's. Plenty of people in the business are going to get bounced out pretty soon. As one person put it, if your lending shop exist only as a result of the support to the market given by the Federal Reserve, it's past the time to rethink that model.

My .02c
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Do you have a sense whether I should lock at 45 vs 30?  I am really sick of watching the yield go up...I thought it would settle after yesterday but now we're up another .09.
 
We're approaching a peak oversold position in the mortgage market. If you have the guts to wait it out, that's what I'd do. If you're wanting a solid nights sleep, lock it and forget it.

At this point, we're talking about .25% in rate more, up or down. If it's up, a refinance is in your eventual future. If it's down, are you going to be comfortable waiting for it to happen? Can you personally absorb a worse case scenario of .25% higher?

Not knowing the full extent of your circumstances, this is the best I can suggest at this time.
 
Soylent Green Is People said:
We're approaching a peak oversold position in the mortgage market. If you have the guts to wait it out, that's what I'd do. If you're wanting a solid nights sleep, lock it and forget it.

At this point, we're talking about .25% in rate more, up or down. If it's up, a refinance is in your eventual future. If it's down, are you going to be comfortable waiting for it to happen? Can you personally absorb a worse case scenario of .25% higher?

Not knowing the full extent of your circumstances, this is the best I can suggest at this time.
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Thanks :)  We can make the payments even at the current rates but to watch it jump one percent over the last week has been more than shocking...I though about locking it in a week ago at 4.2 but thought that the 0.4 spread between the 30 and 60 day was too big to cross...boy was I wrong.  Oh well, I think I may leaning with sticking it out.

The other problem is that my 30 day lock falls just after job reports come out...if the report is good I can see the bond market falling some more. 
 
Soylent Green Is People said:
I think this thread has finally answered the title question: "How low can we go...". Roughly 3.0% Conforming 30 with some costs, 3.375% Jumbo conforming with costs.
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I think you're an 1/8th too low.

But that's kibble.  Today, probably a mere 45 days later and it's 4.25% conforming with costs and 4.625% non-conforming with costs.

That's a little more than 10% shock to payment power in less than two months.  Still not much, but it is $300/month on a $400K loan and about $400 on a $600K loan pushing PITI on a $600K to nearly $50K/yr.
 
Yes, those sellers thinking they can still require -0- contingencies and $20k over asking will begin to see that buyer ebbing away quickly with higher rates at hand. Plenty of resale buyers didn't lock as they could have and they're in for some sticker shock. Even more refinance customers are finding out that they weren't locked either. I feel for the new home buyer who can't lock until you're 60 days from closing. I still believe this spike in rates will come back into the 3.875% or lower range later this year.

For about 2 weeks in May you could get a sub 2.875% FHA 30 Fixed Conforming for -0- points, sometimes with a small lender credit for closing fees. If you paid points you could get a 30 fixed at 2.50% and it might still have made sense for some to buy that low of a rate. Today? 3.5 to 3.75% FHA for now with 4.25 to 4.75% Conforming.
 
Irvinecommuter said:
Yields at 2.61 this morning with a high of 2.66  :'(  Rates are up to 4.5%
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It is increasing way too fast, which is brining shock to the market.  The rise needs to be slow and gradual.
China is little concerning as well.  There stock market crashed close to 6% yesterday because of significant bank liquidity issues and no announcement of Chinese gov't intervention.
 
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