Tuesday, June 23, 2009

Mortgage rate update (2)

Despite continued fears (typical quote: "the sales pace will likely come down as a result of the surge in mortgage rates." –Ted Wieseman, Morgan Stanley), the backup in T-bond yields is not likely to derail the U.S. housing market. Current rates on 30-year fixed-rate conforming mortgages are up by three-quarters of a point from their recent all-time lows. Rates on jumbo mortgages are at their lowest level in three and a half years. Not a big deal. Indeed, buyers on the fence should view this as a good reason to act now before rates go higher.

I should also mention that the narrowing of the gap between conforming and jumbo rates is a very good sign, since it means that the mortgage lending business is functioning in a more normal fashion.

2 comments:

Alex said...

Did you see this? How important was this slackened mortgage standard in heping to create the mess we just went through? And what are your thoughts on this, if any? Story was in Reuters.

Fannie, Freddie asked to relax condo loan rules: report

http://www.reuters.com/article/GCA-Housing/idUSTRE55L39120090622

Scott Grannis said...

I did see it, and it is just amazing. We really have put the foxes in charge of the henhouse. How likely is it that Obama's proposed, mega-regulatory apparatus would catch or put a stop to such egregious behavior?