The average rate for a benchmark 30-year mortgage inched back up 4 basis points (0.04 percentage point) over the past week to 6.39 percent, which is 114 basis points and roughly 20 percent higher than at the same time last year.

At the same time, credit availability has dropped back down to a decade low, jumbo-conforming spreads have narrowed with lender appetite having dropped, risk premiums are on the rise, and the probability of an easing by the fed continues to drop as well, with the odds of another rate hike having jumped to 30 percent.

And for those who have been holding on to some bad forecasting and “reporting” that was making the rounds late last year and continues to be regurgitated, keep in mind that Freddie Mac’s updated forecast, which didn’t make as much of a splash in the industry press or agent newsletters, calls for the 30-year rate to average over 6 percent through the 4th quarter of this year, which shouldn’t catch any plugged-in readers, other than the most obstinate, by surprise.

5 thoughts on “Mortgage Rates Inch Back Up, Odds of an Easing Down”
  1. JPMorgan Chairman and CEO Jamie Dimon said during the company’s Investor Day on the 22nd:

    You’re already seeing credit tightening up…because you know the easiest way for a bank to retain capital is not to make the next loan. So I think you are going to see that and I think everyone should be prepared for rates going higher from here. You know that if that five percent is not enough in Fed Funds if I and…I’ve been advising this to clients and banks: you should be prepared for six, seven…you should be prepared for on the 10-year bond and I also feel this way—the FED doesn’t control the five or ten year rate. They control the overnight rate. So while they’ve been raising overnight rate there’s still too much liquidity in the system which is why stocks are high. Bond spreads are still…your ultimate recession? Not if we’re [talking about what is] reflected in bond spreads! So I think there’s a chance you can have rates ticking up. And not to 3.78! I’m talking about 4.25 4.5 5 6 out maybe even seven. I would be prepared for higher rates if I were someone…whether it happens not we don’t know but you should be prepared for it.

    We aren’t even at The Fed’s terminal rate yet, and while inflation is being reduced, we’re no where near the 2 percent target.

    1. Wouldn’t borrowers whose loans were taken out during the first two years of that period have refinanced into a fixed-rate sometime in 2021 when rates for those loans were at rock bottom?

  2. UPDATE: The average rate for a benchmark 30-year mortgage jumped 18 basis points (0.18 percentage point) over the past week to 6.57 percent, which is 147 basis points, or roughly 25 percent, higher than at the same time last year and the continuation of a trend “which shouldn’t catch any plugged-in readers, other than the most obstinate, by surprise.”

Leave a Reply

Your email address will not be published. Required fields are marked *