Interest rates are up, not a substantial amount, but enough to remind everyone that interest rates can go up as well as down. Rates are up about .25% to .375%, depending on the loan product and some other variables. I find that insignificant. But a homeowner who wanted to refinance to a Conforming 15 Year Fixed Rate at 3.125% who is now being quoted 3.5% is astonished. First, most of us forgot that rates can go up. We thought they only had one trajectory….down. Second, when the 15 Year Fixed Rate was at 3.125%, the client was hoping for 2.875%! And if rates got to 2.875%, people would hope for a little more. The financial psyche of we humans is fascinating. The deals we get are never good enough! We always want more.
How can I track rates?
One of the best gauges to watch to track interest rates is the 10 Year Treasury Bond. Interest rates do not track the 10 Year Bond tick for tick, but it is a good gauge. And mortgage interest rates are not as low as the 10 Year Treasury Bond. But it is a good gauge of the direction of rates. On March 1st 2012 the 10 Year Treasury Bond stood at 2.03%. This was up from its low of 1.8% to 1.9%, which was the range for much of January and February of this year. On March 14th it was 2.29%. On March 19th it was 2.39%.
Don’t try and be a market timer
This blog is a reminder that rates can go up. And also not to get greedy. Any interest rate you get within a half percent to one percent of the current bottom is still a very historical low. Don’t try and be a market timer, and don’t shop around too much. You may find a 1/8% difference in rates between lenders. But the real difference is in the execution. Rates are great, even if they go up a lot from here.
Latest updates
TODAY: Unfavorable repricing is a risk again. MBS are down -5/32 (FNMA 30 yr 3.5 at 101.20), at least 8/32 below morning levels. Investors continue to reduce their expectations for additional Fed MBS purchases (QE3).
March 19th: All Investors have repriced two and three times today. It appears we have a window right now to lock if you want to. If any locks were rejected or you were having issues getting pricing, you should be able to lock/price now if you want to. This is barring any more volatility of course.
March 19th: Unfavorable repricing may be a risk again. MBS are down -8/32 (FNMA 30 yr 3.5 at 102.05), about 11/32 below early morning levels, and about 5/32 below late morning levels.
Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.
