Friday, August 6, 2010

Thirty Year Fixed Rate Mortgage Down to 4.125%

"Unbelievable," says Michael Dunton, Senior VP at Mt. McKinley Bank.

These rates won't last. Lock them in now. When the spike up starts, it will be fast and furious.


  1. Wenzel, NPR this morning had a guy from Fannie (I think) who said thay expect sub-5 mortgages to be around for a while.

  2. Try sub 4% rates. Though the headline infers Jan Hatzius has increased inflation expectations, reading the detail (current versus previous) indicates the opposite. Rates are going down further from here.

  3. why lock in rates now? if the mortgage rates rise, wont the price of real estate go down?

  4. I love how we get a post every couple of weeks with a quote from MiA telling us how unbelievable it is, these rates won't last, etc. etc. Wenzel, is he paying for advertising or something? Haha, seriously. I fully understand the risks involved but I don't for a second believe that these rates are going to skyrocket tomorrow or even next month.

    We'll probably see lower lows before higher highs, short-term!

  5. @Taylor

    Are you going to ring a bell for us all, so that we know when the exact bottom is hit. so that we can all lock in rates then?

  6. Wenzel,

    Would you like me to? ;)

    I am giving you a hard time. I know you're trying to inform via provocation with these types of posts and I know the top will be hard to time with perfection. However, I think that the immediacy and the urgency of these posts is... a bit much.

    That's all!

  7. @Taylor

    I'm dead serious. When it turns, I suspect the climb in rates is going to be fast and furious, moves of 100 basis points in a day won't be out of the question.

  8. @Taylor

    4.125% is unprecedented and is reflective of government involvement rather than market forces. Rates are going down, but prices are not going up--that should worry a lot of people. The Mandarians running the show in DC are beginning to panic because their interventions are not working and, in fact, are making things worse.

    That 4.125% 30-year that Fannie and Freddie are pushing is actually costing the taxpayer, because they both continually need propping up. That price is a panic price on the part of the Mandarians.

    Our experience locally is that most the action on the 30-year is refis, not new purchases.

    I'm with Wenzel, when rates actually bottom out and the market actually takes over, rates will rocket up. We just have to wait when the Federal Government gives up or runs out of money.

  9. MiA,

    Thank you for the info. I apologize if I came across as rude or condescending in my last comments. I am "on your side" in understanding the threat. I know you have a special insight as a banker. I know what the Austrians say, yadda yadda yadda, I am fully on board the Dogma Express, believe me, I am riding the cow puncher on that thing.

    All I was saying is that "at a certain point" bit has proven to be elusive so far. Not to get started on this topic as a tangent but, for instance, Wenzel has been warning "ECONOMIC/STOCK MARKET COLLAPSE IMMINENT!" for over a year now, and while I have fully agreed, it, too, has proven elusive.

    Short and to the point: the contrarian in me would not be surprised to see STILL LOWER rates from here, first, before the explosive move to the upside. This is the greatest bubble in all of history deflating, it would be a bit odd if something perplexing like all-time low rates didn't manifest themselves, right?

    That's all.

  10. Yes, rates could drive even lower, as much as it would be a shock to me. What is troubling, but not surprising to me, is that a lot money has been thrown down the hole to prop up housing and it is still sinking. Anyone holding MBS paper below 5% is due to get hosed, which is why the DC crowd will have to hold the paper and hold down rates to keep the paper from being nearly worthless when rates eventually go up. When the Mandarians give up or run out of money is WTSHTF, imo. The real pain is before us.