so... when do 30 yr mortgage rates hit 5.5% and then what for housing?

[metalman]

the fed shows rates rising, but not much...



what if the fed raises short rates?

is the 30 yr rising due to bond markets pricing in inflation, or are prices falling on account of less demand... gov't buying?

how can you tell the diff?

[Slimprofits]

Re: so... when do 30 yr mortgage rates hit 5.5% and then what for housing?

the Mortgage Bankers Association’s refinancing index is now 57% below the early April peak. Not only that, but new home-buying activity has stalled out too, as the MBA purchase index sagged at a 20% annual rate in May — the first time it has declined in three months.

From David Rosenberg's research note for today

[nero3]

Re: so... when do 30 yr mortgage rates hit 5.5% and then what for housing?

I certainly think hiking short term rates would lover inflation expectations, and lower fixed mortgage rates. A double dip recession is certainly possible, the better alternative I think, is for the fed to start monetizing treasury bonds on a much larger scale to peg the rates at 4 % . That would probably lead to an inflation problem, but they could introduce price and wage controls, and then hike rates again in 4-5 years.

[big67]

Re: so... when do 30 yr mortgage rates hit 5.5% and then what for housing?

the fed shows rates rising, but not much...

Bloomberg says 5.45% on its homepage today WRT 5.00% a month ago. Feds data are probably lagging.

[metalman]

Re: so... when do 30 yr mortgage rates hit 5.5% and then what for housing?

I certainly think hiking short term rates would lover inflation expectations, and lower fixed mortgage rates.

maybe, maybe not. again, depends on why they're rising now, that's my question. are they rising because of rising inflation expectations or because the fed can't monetize them without creating higher inflation expecations?

A double dip recession is certainly possible,

wait... thought you were in the bull market camp.

the better alternative I think, is for the fed to start monetizing treasury bonds on a much larger scale to peg the rates at 4 % .

what, you don't think they would if they could?

That would probably lead to an inflation problem,

exactly. maybe already has?

but they could introduce price and wage controls, and then hike rates again in 4-5 years.

wage and price controls, eh? yeh, those worked like a charm last time.

[zoog]

Re: so... when do 30 yr mortgage rates hit 5.5% and then what for housing?

the fed shows rates rising, but not much...

what if the fed raises short rates?

is the 30 yr rising due to bond markets pricing in inflation, or are prices falling on account of less demand... gov't buying?

how can you tell the diff?

According to this Chicago Tribune article from a couple weeks ago:

Mortgage rates are responding to a sudden rise in the yields, or interest rates, on U.S. Treasuries, which on Wednesday surged to their highest levels since November. Treasury prices and yields move in opposite directions. So when prices fall, yields rise and vice versa.

Investors have been selling Treasuries over worries that the U.S. government's headlong spending to stimulate the economy may prove to be inflationary without doing much to spur on the housing market. The Federal Reserve had been keeping a lid on mortgage rates by spending government money to support the troubled market for mortgage backed securities.

But when yields rose on Fannie Mae and Freddie Mac mortgage bonds, Bloomberg said, selling accelerated in the Treasury markets. The concern may be that the government's expensive effort may get only more expensive, raising the threat that it may be unsustainable.

and this from Boston Globe:

"The message is the bond market is now on board with this recovery and believes in it," says Jim Swanson, chief investment strategist at MFS Investment Management. "People want to be compensated for owning bonds because real growth is coming." They want higher interest rates to offset the chance of inflation that usually comes with economic growth.

From David Rosenberg's research note for today

the Mortgage Bankers Association’s refinancing index is now 57% below the early April peak. Not only that, but new home-buying activity has stalled out too, as the MBA purchase index sagged at a 20% annual rate in May — the first time it has declined in three months.

Sounds like the typical spring & summer buying season might be fizzling this year.

[metalman]

Re: so... when do 30 yr mortgage rates hit 5.5% and then what for housing?

Bloomberg says 5.45% on its homepage today WRT 5.00% a month ago. Feds data are probably lagging.

wow, thx. that's a huge difference. no wonder the housing market is accelerating downward.

[zoog]

Re: so... when do 30 yr mortgage rates hit 5.5% and then what for housing?

Weekly mortgage rate data from Federal Reserve / Freddie Mac, through June 4.

(These are quick charts so might be a little messy in the formatting.)





The recent jump looks ominous, but, rates are still nowhere near where they were back in October.

[jtabeb]

Re: so... when do 30 yr mortgage rates hit 5.5% and then what for housing?

Weekly mortgage rate data from Federal Reserve / Freddie Mac, through June 4.

(These are quick charts so might be a little messy in the formatting.)





The recent jump looks ominous, but, rates are still nowhere near where they were back in October.

I need to buy a house, so I hope THEY KEEP GOING UP and that the dollar doesn't shit the bed. I would love to buy an affordable house, at the right price, for CASH. That's my goal.

[don]

Re: so... when do 30 yr mortgage rates hit 5.5% and then what for housing?

Ugga…Ugga...Home Prices... Prepare to Dive…Prepare to Dive…Ugga…Dive...Dive...Take Her Down to Periscope Depth :eek:

[ax]

Re: so... when do 30 yr mortgage rates hit 5.5% and then what for housing?

Ugga…Ugga...Home Prices... Prepare to Dive…Prepare to Dive…Ugga…Dive...Dive...Take Her Down to Periscope Depth :eek:

These charts are great, but has anyone actually tried to refinance lately or buy a house? If you actually pay your debts like I do, you will be told that you're last in line to refi behind the millions of dead beats who are delinquent despite the announcement of $9 billion in programs for people like myself (even with my mortgage having been bought by Freddie last we checked). Buying a house at these rates is also impossible without paying points I'm told by friends in the mortgage business, which of course, eliminates most people immediately who can barely afford the nut of the down payment to begin with.

[johngaltfla]

Re: so... when do 30 yr mortgage rates hit 5.5% and then what for housing?



Based on 2008 Home Ownership rates (also available as a PDF here from the Census) and the lack of employment expansion and available financing with 0 down, etc., we will not see any recovery until the economy recovers with 4 consecutive quarters of growth.

Thus, if we do recover (big if), I do not see a turn around in the housing market until 2013.

The 5.5% rate is a given by August unless Bernanke accelerates his pace of monetization and acquisition of MBS to clear the books of the banksters.

[aaron]

Re: so... when do 30 yr mortgage rates hit 5.5% and then what for housing?

These charts are great, but has anyone actually tried to refinance lately or buy a house? If you actually pay your debts like I do, you will be told that you're last in line to refi behind the millions of dead beats who are delinquent despite the announcement of $9 billion in programs for people like myself (even with my mortgage having been bought by Freddie last we checked). Buying a house at these rates is also impossible without paying points I'm told by friends in the mortgage business, which of course, eliminates most people immediately who can barely afford the nut of the down payment to begin with.

I tried (trying?) to do a loan modification. I sent them what they wanted. 3 weeks later, they said the needed 2 more forms. I had already sent them these, but I guess they lost them. After I sent them the forms, I did not hear back from them for several weeks. I called and they said they needed 2 more things (which I already sent at first). The lady proceeded to explain that since I am now in default the home will go to foreclosure soon. However, the loan modification, after they get all the forms, takes at least 90 days to process. She said the house might already be foreclosed on by then. In other words, they would rather foreclose on a property instead of modifying the loan.

So, us deadbeats are having the same frustrations. My impression of it all is that the banks do not need to modify loans---> they already got all the money they need from the government.

[zoog]

Re: so... when do 30 yr mortgage rates hit 5.5% and then what for housing?

These charts are great, but has anyone actually tried to refinance lately or buy a house? If you actually pay your debts like I do, you will be told that you're last in line to refi behind the millions of dead beats who are delinquent despite the announcement of $9 billion in programs for people like myself (even with my mortgage having been bought by Freddie last we checked). Buying a house at these rates is also impossible without paying points I'm told by friends in the mortgage business, which of course, eliminates most people immediately who can barely afford the nut of the down payment to begin with.

Back in February I posted an article from sfgate about how Fannie and Freddie were going to start charging more fees to pretty much anyone who doesn't put 30% down. The changes were to go into effect on April 1. Sounds like that happened.

[cjppjc]

Re: so... when do 30 yr mortgage rates hit 5.5% and then what for housing?

The 5.5% rate will not matter.