Mortgage Market Update
by Tom on May 27, 2009
in Market Musings, Market Report, Mortgage Rate Updates
It’s been a few days since I’ve done a Mortgage Market Update post, so here goes…..
- Rates have been feeling some upward pressure lately. We’re at 5.125% with .125 pts for a 30 year fixed refi and 4.875% with .125 pts for a 30 year fixed purchase.
- Rates have been feeling some upward pressure for a couple of reasons: 1) The value of the dollar has been getting hammered lately. 2) Oil prices have been getting a lot of upward pressure – have you seen gas prices lately? 3) As the “auto industry” unwinds, there’s additional question about how much the government has to borrow to keep it all floating and how we’re going to pay it back. That’s also pushing rates upward.
Previously, I had said that I felt there was a 70% chance that rates would go up and a 30% chance that rates would go down. I’m adjusting that, in light of the current market conditions, to a 75% chance that rates will go up and a 25% chance that rates will go down.
Do I expect that rates will skyrocket in the near term? No I don’t. I’d be surprised if we see rates go up to more than 5.5% by year end. But the pressure that’s being put on mortgage rates by the value of the dollar, the borrowing by the government and the continuing poor performance of mortgage backed securities is mounting and will continue to make things go the wrong direction.
I’ll continue to keep you informed.
Tom Vanderwell
