Mortgage rates don't make a U turn, instead think of the letter V
It's been a wild 30 days in the mortgage market. Mortgage rates fell to almost unprecedented lows only to return to previous levels within the month. Have you kept up?
Imagine a V because mortgage rates didn't make a U turn. Rates dropped sharply, turned on a dime and headed higher. If you were in the market to refinance, the window wasn't open very long. If you were buying a home and wanted to lock in the lowest possible rate, you had a very short time period to act. The info was right here for you.
Jan 22, Global stocks drop sharply
"Please take note once again that interest rates are sharply lower, if you need to (and are able to) refinance, now is the time but it is not the time to take any equity out of your house. … A quick note about interest rates. When the Fed lowers fed funds rates as they did this morning, it does not directly affect most mortgage rates which are determined by longer term interest rates."
Jan 25, Mortgage trends
"The window of opportunity for unbelievably low mortgage rates turned out to be 3 days. Mortgage rates are still very attractive but not the almost unbelievable 5.125% that was quoted as recently as Tuesday."
Jan 31, Fed cuts rates but mortgages are higher
"Most people think that when the Fed cuts interest rates, mortgage rates will go down as well but as we've pointed out before, the Fed funds rate are short term interest rates while mortgage rates are based on long term interest rates. Thus, since long term interest rates on both mortgage backed securities (MBS) and 10 year US Treasury Bonds are higher since the Fed rate cuts, mortgage rates are correspondingly higher."
Feb 19, Mortgage rates reports
"Mortgage rates have been ticking up in the past few weeks since the amazing lows we witnessed at the end of January when the Fed cut Fed Funds rates sharply. As I've pointed out on multiple occasions, the Fed controls short term rates while long term rates are more sensitive to market conditions. Mortgage rates are still very attractive however, hovering around 6% for a 30 year fixed rate loan."
For the very best explanation of what occurred in the mortgage market, check out this post from Dan Green, How mortgage rates went from (relative) riches to rags in 30 days. It's a great 3 minute read and as an added bonus, Dan's included a super funny 3 minute summary of Airplane! from U Tube.
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