Mortgage Rates on the Rise
Mortgage rates are rising, according to the Times, in the wake of the troubles surrounding Fannie Mae and Freddie Mac. While rates continue to be low by historical standards, they’re high compared to the levels they’ve been at in the past several years: The average yesterday was 6.71 percent for 30-year, fixed-rate mortgages, up from…
Mortgage rates are rising, according to the Times, in the wake of the troubles surrounding Fannie Mae and Freddie Mac. While rates continue to be low by historical standards, they’re high compared to the levels they’ve been at in the past several years: The average yesterday was 6.71 percent for 30-year, fixed-rate mortgages, up from 6.44 percent on Friday, and 7.8 percent for jumbo loans. Rising rates primarily threaten to affect borrowers who have had loans with an interest-only teaser period, which could deepen the national housing morass. When we get to rate levels like this, the market just shuts down, said a mortgage broker based in Colorado. Some analysts argue that the rising rates are a temporary blip. Do any readers have first-hand experiences to report from the last few days?
Woes Afflicting Mortgage Giants Raise Loan Rates [NY Times]
Photo by woodleywonderworks
“Mortgage rates are higher now than when the Fed began its easier policy (not easier rates). The Fed lowered the benchmark rate 3.25 percentage points to 2 % since September. These are historically high spreads.”
For the last time, The FED does NOT set interest rates! The Bond market determines interest rates. The Fed follows the 44, 13, 26 week treasures.
Do any one know why rates are going up? Let me help you out. There is a Mortgage rescue bill coming down the pike.
Fannie, Freddie Rise After Lawmakers Agree on Bill
http://www.bloomberg.com/apps/news?pid=20601087&sid=aQurXvcpzmI4&refer=home
Fannie Mae and Freddie Mac rose after U.S. lawmakers reached a deal on legislation that authorizes Treasury Secretary Henry Paulson to bail out the mortgage-finance providers while placing few restrictions on the companies.
Thats 800 Billion dollars Paulson can do what ever he wants! He’s going to hook up his Homeboys! The treasury is going to protect the wealth of some rich people at the taxpayer expense. The holders of US Treasuries are saying “Get Bent” and are selling off! They feel if Government wants to backstop this BS them, [pay a higher rate to do so.
The hijacking of America is happing right in front of you face and please don’t say I’m hyping things up! These are some “strange days”…
For the clueless! Please keep your eye on the 10 year treasury! This determines 30 year mortgage rates!
http://www.bloomberg.com/markets/rates/index.html
The What ((I told you)
Someday this war is gonna end…
6.71 is the average rate for ALL mortgages and 7.8 is the average for jumbo mortages. Since most mortgages for bkln are jumbo (at least for the neighbs that are driving bkln growth), that is a HUGE increase since last summer (I got a 6.6 then on a jumbo) and seems to me will have a big big impact on prices.
Boreum Hill – you are right 6.71% is not high by historical standards – BUT $1000 a sq ft apartments and 2.5M brownstones in Brooklyn is very high by historical standards.
Economics effects EVERYONE and even if you make 200k or 400K or 1M – i it costs more to borrow then it has a downward pressure on home prices.
You’re right Boerum Hill but what’s different this time is the spread. These rates are being kept high by the lending institutions compared to their cost of money. The reason is so that they can shore up their balence sheets and become more profitable. The 5 year Treasury rate is about 3.5% and the 10 Year is about 4.1%.
Mortgage rates are higher now than when the Fed began its easier policy (not easier rates). The Fed lowered the benchmark rate 3.25 percentage points to 2 % since September. These are historically high spreads.
All of the institutions are acting in concert in order to increase profitability. Their lending criteria are tight too so they are getting better borrowers at an even higher spread. Eventually the balance sheets will look better and they will cut the spreads…and the mortgage rates.
By historical standards, 6.71% is a very reasonable rate for a 30 year mortgage.
Turcod:
“85% of all families in prime Brooklyn neighborhoods make close to $400 K a year. ”
Source please? And if you don’t reply, I’ll just assume its your ass.
Yes Turcod, I’m curious about where you are pulling your stats. We are in the market for a family-sized property in prime bklyn and don’t make anywhere near that income, nor do many friends of ours in these neighborhoods. Only reason we can afford to buy is from sales of past real estate (here and elsewhere) so our purchase will be largely cash with a modest mortgage. There are plenty of people who work in arts & non-profit in these neighborhoods who are not pulling in huge money. And before you say, well they have all cash, that’s not quite true either. We have enough cash to be in the game, but we are actually sensitive to our mortgage payments, and if interest rates get too high, it will impact how much we stretch for a given property.
turcod…”85% of all families in prime Brooklyn neighborhoods make close to $400 K a year”
Please cite your source for this tidbit of information. Or did you just pull it out of somewhere??
Secondly…”A couple points up, will not stop Brooklynites from buying up a brownstone or condo.” I’m assuming that the Brooklynites that you are referring to already own a brownstone or a condo!!!!
Get another cup of coffee before posting again
6.71% interest for Brooklynites will have no affect for the NYC area. 85% of all families in prime Brooklyn neighborhoods make close to $400 K a year. A couple points up, will not stop Brooklynites from buying up a brownstone or condo. We are talking pocket change for the majority of these families.