TODAY’S RATES & HOUSING NEWS
Interest rates have continued to move higher over the past 7 days.
Interest rates are determined by trading levels in the bond market, and Mortgage Backed Securities continue to trade lower.
See major drop downward in the MBS market over the past 2 weeks.
This trend has pushed mortgage interest rates to their highest levels in over 20 years.
See quote below from Matthew Graham at Mortgage News Daily:
“Reasons for the rising rate momentum are apparent and ongoing.
Decades-high inflation required decades-high rates to fix.
The higher rates are supposed to be damaging the economy more than they have.
Until that damage shows up, rates have a green light to continue higher.
As more and more market participants abandon their preconceived notions regarding an imminent rate reversal, the upward momentum takes on a certain glacial quality.
In other words, it’s self-sustaining, often resulting in days like today where rates look like they’re acting on some obvious catalyst despite the absence of any such news.”
In order for mortgage rates to fall, we likely need to see more economic reports showing the economy is slowing.
The FED has raised the Federal Funds rate in order to lower inflation and slow down the economy.
Until this takes a noticeable effect, interest rates will likely maintain at higher than normal levels.
This week’s big market mover is FED President Jerome Powell’s speech on Friday at the Federal Reserve’s Economic Policy Symposium.
Last year, Jerome Powell warned us that the road to bring down inflation would be long and painful.
“While higher interest rates, slower growth and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses”
I expect Jerome Powell’s speech to state that the FED will continue to make decisions based on economic data.
While the fight to lower inflation has worked, we are still not where we want to be.
Below is a good article from U.S. News previewing Jerome Powell’s speech.
Below is Mortgage News Daily’s average rates across America as of 8/21.
Likely a bit higher when 8/22 comes out.
Below is Green Home Loans rate sheet today.
There are a lot of characteristics that go into a mortgage rate – credit score, investor, loan to value, loan amount, costs, etc.
Please call us to go over your specific scenario so we can price your loan out accurately.
WARREN BUFFET INVESTS IN THE HOUSING MARKET
Legendary investor Warren Buffet put his money in the U.S. Housing market, per recent 13F Filings.
Berkshire Hathaway invested nearly $800 million in Home Builders: DR Horton, Lennar Corp. and NVR Inc.
See article from Yahoo Finance below: