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Tuesday, December 14, 2010

Mortgage Rates pushing 5%

by Calculated Risk on 12/14/2010 07:14:00 PM

From "Soylent Green is People":

My favorite word of the day, remarked by another LO, is "gruesome". That's what's going on in the mortgage market.
A "true" -0- point, -0- lender fee refinance rate is in the mid 5's which is wholly unappealing to consumers. Benchmark FHA 30 fixed loans are in the 4.75% rate range, also for 1.0 point origination.
From economist Tom Lawler:
The US MBS market had a very bad day, and secondary market yields surged from early this morning. For example, Freddie Mac’s required net yield on a 60-day commitment to purchase conventional conforming 30-year fixed-rate mortgages went from 4.50% at 8:30 this morning to 4.64% at 3:00 PM. For Freddie “PMMS” mortgage rate followers, such a level would, if sustained, suggest that next week’s “Freddie 30-year primary mortgage market rate” would be somewhere in the neighborhood of 4 7/8% and 0.8 point.
Usually I track Freddie Mac's Primary Mortgage Market Survey® (PMMS®) and it appears 30 year rates will be pushing 5% this week. "Gruesome" is the word for those in the mortgage industry, especially for refinance activity.