Mortgage Rates at Decade Highs

[james.hendrickson]

All,

Saw this on Twitter this morning - thought it made sense to post. Evidently mortgage rates are nearing 5%. This is the highest in a decade and suggests markets are responding to anticipated interest rate increases by the Federal reserve.

Source: Liz Ann Sonders Twitter feed.

Why this matter? If your mortgage rate is under 5%, not may not be a great time to refinance.

[disneysteve]

Our mortgage was about 9% when we bought our house. The world will survive.

[corn18]

Maybe we will finally return to normal where the 10 year treasury is 4-5% and a mortgage is 6-7%. I wouldn’t count on anything normal for the next few years as the Fed sells off its $11T it is carrying on the balance sheet.

[bjl584]

My first mortgage was 5.25% on a 15 yr.

My current one is around 4.49%

[Fishindude77]

I've got some close friends in banking and was talking earlier this week. 15 Year fixed are now pricing at about 4.75% and 30 year fixed 5.25%, they expect to be up around 6% before too long.
As cheap as loans have been 2-3%, most banks didn't even retain any of those loans in their portfolio, they immediately sold them off and took fees for doing the deal and managing the account. Wasn't enough money there to make it worth their effort to hold the loan.
Maybe at the higher rates they will be able to retain a few more loans in house.

Going through and purging a bunch of old paperwork several weeks ago and found our mortgage from 1989, it was 9.9% fixed, 15 year.

[LivingAlmostLarge]

2002 I got a fixed 30 year for 6.375% and was TOLD by EVERYONE it was a killer deal. I never had one again until 9/2020 when chase offered me 2.875% fixed no cost just a relock on our current loan. Very weird. i currently have a 2% 7/6 arm from 6/2021

[amarowsky]

Well at least in Michigan, this increase in mortgage rate is not really slowing down the market...

I just accepted an offer on a listing. The home was bought in 2019/November ish, for $225k (2,100 sq foot Tri-level , in metro area, w/ .36 acre lot). We just listed for $299k, and client's accepted an offer we negotiated at $347k, w/ an arsenal of waivers to make it a super safe offer accept.

Worth mentioning = we had 60 showings in 2 3/4 week days (mon - wed @ 6p) , w/ a total of 15 offers ALL over asking.

Granted this is just an anecdote, and some homes stay on market (If severe DIY needed, priced poorly, or other) but anything that is at least 70% livable = typically lasts <7 days on market in S.E. Michigan.

[ua_guy]

The best rates on a 30 year fixed are over 6% now, yes?

[LivingAlmostLarge]

The best rates on a 30 year fixed are over 6% now, yes?

i think so. this is a very interesting economic environment for me to play my rate game. First time in 2 decades I have a risk of needing my cap on my rate which I think is 7%. So in 6 more years it'll cap out at 2% + 5% lifetime cap. That will be interesting and it floats every 6 months. My principal without extra payments will be down $156k after 7 years. My guess is if we are in our current house it'll be a refinance into another arm if needed to get the rate lower than 7%. And if the rates higher than the 7% will look like a steal.