The Million Dollar Mortgage Rate Question!!

Been Watching this weeks Interest Rates climb & climb this week??? 

So here’s the million $Dollar question…. When are mortgage prices going to improve?  Why is the 10-yr Treasury down into the 3.5% range, yet conforming/conventional 30-yr loans, eligible for FNMA & FHLMC, back up into the 6% range? The widening that is occurring out to these levels, which statistically speaking happens once every 4,000 years, is a combination of several factors.

First, investors and money managers feel safer putting their money into Treasury securities rather than mortgage-related securities (right now, that seems like a “no brainer”) Subjecting their money to the potential of borrowers defaulting and property depreciation is something that many prefer not to do. These two factors have led to losses for FNMA & FHLMC, along with others, and some investors have been selling mortgage securities in order to meet capital requirements. And selling has led to lower prices, and thus higher rates. That’s it in a nut shell.

Stay tuned to see how this weeks volitale market continues…