Could mortgage rates go lower? Yes. They probably will, but not by 0.5%, and not in a day. They could also go higher. One place they're not going is 0%.If you are a realtor or financial services professional who has asked your mortgage person about getting that nice new 0% rate today (and there are stunningly high amount of you out there if you're being honest), read it 3 times. As a point of contact for people getting ready to make financial decisions, you have a responsibility to avoid spreading misinformation. It engenders animosity between borrowers and lenders, and it further bogs down an already bogged down system with questions that wouldn't exist with just a modicum of effort to elevate our understanding of the rate world. The above information comes from Matthew Graham who is the COO for the MMG. He went on to say:It's extremely important for the sound functioning of the mortgage market that consumers read and understand the following: THE FED DID NOT JUST CUT YOUR MORTGAGE RATES!I'm not a loan officer. I don't play one on TV. I don't benefit from the decision you make on locking a mortgage rate. I'm just a guy who watches and understands the day-to-day movement in average mortgage rates better than just about anyone. It's one of the few things in this life I will claim to be the best at. You can take what I'm saying to the bank, literally and figuratively. I can't count the number of articles I've written or the variety of ways I've reported mortgage rates moving in the OPPOSITE direction as a Fed rate cut/hike, or simply staying put despite a Fed cut/hike.While mortgage rates definitely take cues from the broader bond market (especially when markets are relatively calmer), they move for several other reasons. That caused a lot of head scratching this week as mortgage rates jumped at the fastest pace EVER while many savvy consumers were still waiting for them to drop as much as Treasury yields had dropped. One of the biggest reasons for the mortgage vs Treasury disconnect was a massive supply glut of new mortgage debt caused by rampant refinance demand recently. After all, even if people felt like rates SHOULD BE lower, they nonetheless hit new all-time lows last Monday and successively broke 3-year lows in few weeks prior. This flood of mortgages needed to be sold to investors in order for mortgage lenders to keep lending. But investors were no match for the unprecedented spike in supply. Like any marketplaces with way too many sellers and not enough buyers, prices rapidly fell, and falling prices on mortgages equate to higher rates for consumers.Supply must also be considered from the lender's standpoint. Even in cases where lenders still had money to lend, the record surge in refinance demand forced them to raise rates simply to slow the flow of new business.Supply may have been the biggest issue for the mortgage market this week, but it wasn't the only issue. Mortgage investors were also spooked by the speed of the decline in rates heading into March. When consumers pay off their old mortgages faster than expected (because they're refinancing), mortgage investors earn less interest. That gives them another compelling reason to pay less for mortgage debt. And again, mortgage investors paying less for mortgages = higher rates.To add insult to injury, 10yr Treasury yields moved significantly HIGHER throughout the week. So even if mortgage rates could have overcome all of their own specific issues, their typical guidance giver was still telling them to move higher. Bottom line: mortgage rates have had no reason to move lower this past week and every reason to move higher. The Fed's QE (just announced) sounds like a lot at $200 bln, but in this market, it won't even cover 2 months' worth of new mortgage supply. It's a token handout meant simply to ensure the mortgage market continues to function smoothly, and not nearly enough to drop us instantly back to all-time lows. It's a tourniquet, not a panacea. Where rates go from here will depend on where the bond market goes. To be sure, there's a very good chance that yields will stay extremely low and move lower due to what many see as a fairly large and inevitable recession. If that increasingly looks to be the case, mortgage rates will gradually return lower, BUT--and this is the important "but"--MORTGAGE RATES AREN'T DROPPING 0.50% TODAY AND THEY'RE NOT ANYWHERE CLOSE TO 0%. They were a lot closer to 4% on Friday afternoon (many scenarios were pricing-out higher than that).
Author:DownPayment.mobi DPA Phone: 612-305-8487 Dated: March 17th 2020 Views: 1,114 About DownPayment.mobi: ...
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Jilly walks us through her amazing DIY project! She put together a bar
"I tried to sell last year and I was unsuccessful so I decided to get some new opinions on what I should do. I interviwed two agents when I was getting ready to sell my home the second time. Angela and the other top person in the area. I was very impressed with both and both she and Angela came up with similar values for our home. The problem was that Angela's value was with me doing three projects and the other Realtor told me that I did not have to do anything. My wife and I were leaning on going with the other Realtor and Angela asked if she could come over and go over a few things with us.
She pulled out the comparable homes that we had picked together when she first met with us and she asked us to look at the pictures. All of the things that Angela was telling us we should do were done on those homes.
She then asked us to think about the signs that we have seen in the area that were his and the signs that we have seen in the area that were hers. Then she asked us one really good question. she said "Do you want to list with the agent that has his signs go up, quickly have a sold sign and then the sign disappears or list with the agent that seems to have the signs up forever. It seemed really logical but we had never thought about it that way. I had always thought about how many signs I saw for the other agent. It made sense that the other agent was not doing more business than, it's that her signs stayed up much longer.
We were convinced to list with Angela but we told him that we thought that our home would be able to sell without doing the things that Angela had suggested. she told us she would market our home like it was the best thing on the market. A month later our home had not sold. she told us we could do the things that she had suggested or drop the price to match the value.
Being a stubborn German, I did two of the things that Angela suggested but not the third. Three weeks later, Angela was talking to me about feedback. she told me that we were going to hurt ourselves unless we decided on one path or the other. Either finish the last project or drop the price before we were stale on the market.
I finished the last project, we went back on the market and sold three showings later. I tell my friends that it was just luck but I know different. Everything that Angela told us she was going to do, she did. Everything that Angela told us was going to happen when we first met with him happened. The price we would get for our home if we did the projects she said we needed to do, we got (once we did the project) she told us the truth and I am grateful that we listed with him and I would suggest that anyone selling a home interview him.