Skip to comments.Mortgage rates defy forecasts [Unexpected!]
Posted on 05/10/2014 4:27:38 PM PDT by BenLurkin
As 2014 arrived, experts were confident that the 30-year mortgage rate would rise to at least 5% this year as the Federal Reserve cut back a bond-buying program, which had depressed the rates to unheard-of lows in 2013..
So much for the experts. The Fed has reduced purchases to $20 billion a month in mortgage bonds, down from $40 billion when the program began in September 2012. Yet lenders this week were offering 30-year fixed home loans at an average of 4.2%, the lowest rate in six months, according to home finance giant Freddie Mac.
Freddie Mac chief economist Frank Nothaft's forecast is similar: a rise to 4.6% or 4.7% by year-end, reaching 5% in mid-2015 instead of the end of 2014 as Nothaft had expected. A sluggish first-quarter economy, due in part to a harsh winter, slowed down the housing market and reined in borrowing costs, Nothaft said.
He, Zandi and Joel Kan, director of forecasting at the Mortgage Bankers Assn., all said international concerns, especially worries over Russia's aggressive stance in the Ukraine, had also helped drive down rates as investors sought a secure place for their funds.
"A lot of money flowed out of emerging markets," Zandi said. "It went back into the developed countries the U.S. and Europe. They just didn't want to be in Turkish bonds or Brazil bonds."
(Excerpt) Read more at latimes.com ...
Barrymore says refinance now:
“We all stand to benefit by simplifying refinancing | The White ...”
but as usual, no one’s biting.
30% of current mortgage activity is home equity loans.
Follow that to its logical conclusion.
With GDP Growth (cough, cough) at MINUS .08%, rising Interest Rates put us into a Depression faster than you can say “The Butcher of Benghazi”.
Housing, the home of inflation. Meanwhile we are aborting the homebuyers of the of the future every single day. But that’s just a social issue.
We get enough upside-down, un-credit worthy, defaulting homeowners and the feds—actually, you and me, our kids—can just bail them out again, as in 2008.
Print more money, bully lenders, more BS programs—that worked so well the last time.
The housing market is still relatively dead.
What is this mortgage of which you speak?
Mortgage rates remain extremely low by historical standards, but qualifying for them has become tougher, and mortgage appraisals are shockingly low. So, yes, you should buy now -- or refinance -- if you can qualify; if you can accept the fact that your lender 's opinion as to the value of your house is considerably lower than yours is; and if you can put up a good slug of cash. I refinanced a year ago, and got a great rate, but only because I paid off almost half of my old mortgage. For the remainder, I got a 10-year mortgage at a fixed rate of 2⅝%.
I work in the Mortgage Dept. of a Credit Union, and for the past few month it has seemed that Home Equities and Pre Approvals are running about the same amounts; each have been about 35-40% of our total applications. Refinances and Purchases run about 20-30% of the total.