Mortgage rates back to 3% – again

The 30-year Fixed Rate Mortgage ticked back up to 3% this week. I re-read Are Mortgage Rates headed Up or Down? which I published in June and I still think it summarises the situation quite well. Hence I have included the link rather than repeating the arguments.

The proximate cause  for the increase in mortgage rates this week was the increase in the yield on the US Treasury 10-year Note. The increase started last week (after the Freddie Mac weekly survey, which is collected from Monday-Wednesday) when the Federal Reserve (Fed) confirmed that, if current trends continue, it will start to reduce its purchases of both Treasuries and Mortgage Backed Securities (MBS) soon and aim to end purchases by the middle of 2022.

At the same time, we saw a rate increase in Norway – the first in Europe- following earlier increases in Brazil and South Korea. And while the Fed continues to state that it will not consider actual rate increases (I am not sure why they refer to it as “lift off”- sounds like rocket-speed increases which it will not be) until after the end of the bond purchases, investors noticed a shift in the number of members forecasting a rate increase in 2022 rather than 2023.

And inflation continues to run hot. The Fed thinks this is transitory, but many others fear that it will be sustained forcing the Fed to raise rates sooner than it currently anticipates.

The Numbers (more…)

Hello sub 3% Mortgages – again

This week’s drop below 3% – again – reminded me that the only one thing more fraught than commenting on mortgage rates is trying to predict where rates are headed. (see below for some of my posts about mortgage rates.)
After rising steadily from 2.65% at the beginning of the year to 3.18% by the end of March, the 30-year Fixed Rate Mortgage (FRM) has backed off again and this week the rate dropped back under 3%.

Mortgage rates
Freddie Mac weekly survey


Goodbye sub 3% mortgages

It was only last July that the 30-year Fixed Rate Mortgage (FRM) dropped below 3% for the first time and this week it moved back above 3% again, following the direction of the 10-year Treasury Note (10T).

Mortgage rates (more…)

Where have all the sellers gone?

As I read this New York Times article: Where have all the houses gone? my mind went to Yogi Berra’s line of “it’s deja vu all over again” as I checked my files and discovered that this will be my 5th article with this title – and the first was written in 2013.

Let’s look at the what and the why.

First, the what. This chart shows that inventory has plummeted across the country:

Housing Inventory

The why (more…)

Are mortgage rates about to rise?

Following the Georgia Senate election results, which gave control of the Senate to the Democrats, along with the House of Representatives and the White House, the yield on the 10-year Treasury Note (10T) – the most sensitive to increased Government spending – jumped from 0.93% on Monday to 1.13% on Friday, based upon the expectation that increased Government spending would lead to more borrowing which would need higher interest rates to attract investors.

Why does this matter for mortgage rates?  Because the rate on the 30-year Fixed Rate Mortgage (FRM) is based upon an extra yield – spread – that investors require over that available on 10T. The national average reported on Thursday ( based on rates from Monday-Wednesday) was a record low of 2.65%, but next week will almost certainly see an increase. (more…)