Mortgage Market Survey 2/4/16

Having slipped below 4 percent four weeks ago, the average rate for the benchmark 30-year mortgage dropped to 3.72 percent over the past week as concern about a global slowdown remains and the resultant flight-to-quality continues to drive the 10-year Treasury yield down to its lowest point in nearly a year.

The average 30-year mortgage rate is now 25 basis points below the 3.97 percent rate in place prior to the Fed’s first rate hike in December.

And having dropped from 56 percent at the end of 2015 to 30 percent two weeks ago, the probability of a second rate hike by The Fed in March has dropped under 10 percent according to the futures market.

Comments from Plugged-In Readers

  1. Posted by johny

    A recession is on its way… the next 12-18 months.

  2. Posted by sfrepro

    2018 here it comes!

  3. Posted by 4th Gen SF'er

    CITI just declared that the world economy is in a “death spiral”. Oh boy. Here it comes. I’m just glad we did not get the HELOC that a RE friend was saying we should get. “Fasten your seatbelts, it’s going to be a bumpy ride”….we’ll see what happens.

    • Posted by Ohlone Californio

      Indeed, a “death spiral” in commodities markets is what was said. But a continual horizon of low oil prices also creates growth opportunity, particularly in emerging markets.

    • Posted by BayviewSF

      If you believe there is an economic crisis coming, it would help you to get the HELOC but do not use the HELOC when you do not need to. Having a HELOC would give you flexibility when you lose your income.

  4. Posted by anon

    I don’t necessarily see how a potential recession and the HELOC are connected – unless you think you or your spouse may become unemployed and not be able to service the debt. Go use the line to buy a nice Patek or AP – it’ll hold it’s value far better than equities.

    The death spiral in commodities is not the ultimated concern in Citi’s forecast – it is merely the catalyst. The point is the “‘significant and synchronized’ global recession” caused by commodity deflation.

    • Posted by two beers

      ah, but what caused the commodity deflation, grasshopper?

      • Posted by Jimmy The House Flipper

        I’ll tell you what caused it — billions of people simultaneously woke up to the fact that they don’t need 99% of the disposable crap they buy each day, so China’s economy crashed and everything went down with it.

        • Posted by two beers

          “billions of people simultaneously woke up”

          Riii-iight, billions of people had the same epiphany at the same time…Got any other fantasies to sell me?

          Actually, consumer spending is still near an all-time high as a percentage of GDP, so you’re very, very wrong.

          This slow-down isn’t demand driven.

          Try again.

  5. Posted by L'anon

    LinkedIN down 43% in one day! Makes Salesforce’s 13% drop look like nothing.
    Just an amuse bouche for what happens when the markets start hungering for safety and solid profits and tire of the airy and insubstantial mousse of growth promises.

  6. Posted by anon

    Would that that were the only problem…

    The problem is the giant, stagnant pool of loans that companies and people around the world are struggling to pay back. Bad debts have been a drag on economic activity ever since the financial crisis of 2008, but in recent months, the threat posed by an overhang of bad loans appears to be rising. China is the biggest source of worry. Some analysts estimate that China’s troubled credit could exceed $5 trillion, a staggering number that is equivalent to half the size of the country’s annual economic output.”

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