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I am the author of this blog and also a top-producing Loan Officer and CEO of InstaMortgage Inc, the fastest-growing mortgage company in America. All the advice is based on my experience of helping thousands of homebuyers and homeowners. We are a mortgage company and will help you with all your mortgage needs. Unlike lead generation websites, we do not sell your information to multiple lenders or third-party companies.
Its been a bad month for mortgage rates. In 3 weeks the mortgage rates are up 0.25% to 0.375%.
Freddie Mac’s weekly survey on April 25th, 2013 reported the 30 Year Fixed at 3.35% with 0.7 points. May 16th survey reported 3.51% with 0.7 points. A quick look on Bank Rate today shows 3.66%. All these rates are for conforming mortgages under $417,000. Loans over that limit are typically 0.25% higher in rate.
Mortgage rates are directly impacted by how mortgage backed securities (MBS) trade on Wall Street. Thats why they can potentially change every few minutes. Usually better economy news results in selling of MBS and worsening of mortgage rates.
Since the release of the stronger than expected April Employment report on May 3, investor sentiment toward MBS has turned more negative. During this time, most rallies in MBS have been met with additional selling. Labor market improvement could also bring the end of the Fed’s bond buying program faster. Fed buying the bonds, especially the MBS is one of the most important reasons why mortgage rates have been very low in last 2 years.
Outlook for Mortgage Rates
Its been a very volatile year for mortgage rates. The rates have moved up or down very sharply, sometime rising by 0.25% in couple of weeks. It has still managed to stay under 4% for most mortgages under $417,000. Trends point towards further worsening of rates. But one month of bad unemployment report could result in another U turn. Whether we will see that or not is anybody’s guess.