Mortgage rates

2023 - 3 - 14

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Image courtesy of "Forbes"

Why Home Mortgage Rates Are High Relative To Treasuries—And ... (Forbes)

The interest rate on home mortgages is running much higher than usual relative to the interest rate on long-term treasury bonds. The spread will probably ...

But if interest rates rise, that borrower holds the originator to the quote. The narrowing of the spread, when it occurs, will add more downward pressure to mortgage rates. For prospective home buyers looking at their likely mortgage expense, or for new homeowners looking to refinance, the actual mortgage rate will fall when the Fed starts easing, or possibly earlier in anticipation of that easing. Once they get rates to a level that can continue for years, the spread will narrow. At any moment in time, the total spread is the sum of the retail spread and the wholesale spread. The option to refinance means that when interest rates drop, homeowners refinance. That is the wholesale mortgage spread. The first week of 2020, for example, the average mortgage interest rate was 3.72%. But homeowners have the option to refinance when mortgage rates drop. The interest rate on home mortgages is running much higher than usual relative to the interest rate on long-term treasury bonds. The average 30-year fixed rate mortgage cost the homeowner 4.37%, The difference was right at the long-term average of 1.69%. Most of the time the spread ranges between 1.5% and 2.0%.

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Image courtesy of "Bankrate.com"

Mortgage Rates Fall After Banks Fail | Bankrate (Bankrate.com)

The collapse of Silicon Valley Bank and Signature Bank injected fresh unease into the U.S. economy, sending mortgage rates tumbling.

But if spreads calm to the high end of the normal range – 200 basis points – that would cut mortgage rates by about three quarters of a percentage point. The gap between 30-year mortgage rates and 10-year Treasury yields, known to mortgage insiders as “ At first, mortgage rates rose, climbing as high as 6.77 percent a few weeks after the WaMu closing. At the time, the average 30-year mortgage rate was 6.32 percent, according to Bankrate’s national survey of lenders. There’s a catch: Lower spreads require investors to feel at ease, something that seems unlikely in the shadow of two of the three largest bank collapses in U.S. “As for where rates go from here, it will depend largely on the stability of the financial system,” McBride says. If the 10-year yield stands at 4 percent, for example, the 30-year rate typically ranges between 5.5 and 6 percent. Now, everyone is rethinking – and a less assertive move by the Fed could relieve some of the upward pressure on mortgage rates. [failure of these two banks](https://www.bankrate.com/investing/bank-stocks-and-etfs-bank-collapse/) injected a fresh round of unease into the U.S. [Silicon Valley Bank](https://www.bankrate.com/banking/silicon-valley-bank-collapse/), with $209 billion in assets, and Signature Bank, with $118 billion, were the second- and third-largest bank failures in U.S. For homebuyers, the trend line matters because the 10-year Treasury yield is a reliable indicator of where mortgage rates are headed. bank had failed since 2020](https://www.bankrate.com/banking/list-of-failed-banks/), so this one-two punch sent shockwaves through the financial sector.

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Image courtesy of "Mortgage Professional America"

Mortgage rates fall in wake of bank failures (Mortgage Professional America)

Mortgage rates fell on Monday in the aftermath of regional bank failures -- the average rate on a 30-year fixed home loan dropping to 6.57% from 6.75%, ...

“With the sudden failure of Silicon Valley Bank and Signature Bank, we want to underscore the importance of maintaining strong capitalization and diversified sources of funding,” said Steve Miller, FFB Bank president and CEO. And that’s why we’re not seeing a huge drop in rates the way that we should based on how the bond market is performing.” Now they have to turn their focus on a more pressing issue and that’s confirming the stability of our banking system, which is too much market chaos. “Now what has happened with these bank failures is kind of the epitome of negative economic news, or market chaos. “Is it feeling a little too 2008 for you?” she added before explaining why mortgage rates have not dropped as much on the bad financial news in the banking industry. The self-described “mortgage mentor” sought to assuage fears the bank failures development was comparable to the Great Recession of 2008.

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Image courtesy of "Barron's"

Mortgage Rates Retreat. CPI Could Help Them Move Lower. (Barron's)

The 30-year fixed-rate mortgage was 6.57% on Monday—a 0.19 percentage point fall from Friday, according to Mortgage News Daily.

The share of respondents in [Fannie Mae ](https://www.barrons.com/market-data/stocks/fnma)’s Home Purchase Sentiment Index who said they were [concerned about losing their job](https://www.barrons.com/articles/good-bad-time-to-buy-a-home-survey-45d67552?mod=md_stockoverview_news&mod=article_inline) rose to its highest level since January 2021 in February. [Upheaval in the banking sector](https://www.barrons.com/articles/first-republic-everything-fine-why-market-worried-2e2f1394?mod=hp_LEAD_1&mod=article_inline) caused by the failure of SVB triggered investor hopes that the Federal Reserve [would soften in its fight against inflation](https://www.barrons.com/livecoverage/stock-market-today-031323/card/stock-futures-climb-as-regulators-tackle-silicon-valley-bank-fallout-KWuiv9GbHNmaV1Xj11w4?mod=article_inline). “It is deeply unsettling to see these banks fail,” said the Mortgage Bankers Association’s Fratantoni, adding that uncertainty could make potential home buyers, business owners, and investors more cautious in the near-term. [Barron’s reported Monday](https://www.barrons.com/livecoverage/stock-market-today-031323/card/treasury-yields-continue-to-tumble-hBEDVT4CN5olAqzXgnY9?mod=hp_LEAD_2_B_1&mod=article_inline). [driven by rates](https://www.barrons.com/articles/housing-real-estate-market-mortgage-rates-ca693bdb?mod=article_inline)—but whether this recent mortgage rate pullback drop results in an uptick in buyers is yet to be seen. The slide continued on Monday, with the 10-year Treasury yield falling 0.179 percentage point to 3.515% as of 3 p.m. Sam Khater, Freddie Mac’s chief economist, said in a release last week that mortgage rates gained “as the Federal Reserve signals a more aggressive stance on monetary policy.” Core inflation was 5.5% higher than year-ago levels and gained a seasonally-adjusted 0.5% in February from January—slightly higher than the 0.4% expected by consensus. The 10-year Treasury yield sank on Friday, falling 0.268 percentage points. The website’s survey of rates pegged the 30-year fixed-rate at 6.57% on Monday—a 0.19 percentage point fall from Friday’s levels. The index was 6% higher than year-ago levels, and increased 0.4% on a seasonally-adjusted basis in February from January. If the monthly inflation gauge eases, long-term Treasuries could remain in their lower range or drop slightly, Fratantoni said earlier this week.

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Image courtesy of "GlobeSt.com"

​Banks Collapse Affecting Mortgage Rates, VC, PropTech (GlobeSt.com)

A drop in home mortgage rates, a pause (or even cut) by the Federal Reserve at its March 22 meeting, and the need to obtain new letters of credit are among ...

[New York Metro](/markets/new-york-metro/) [New Jersey](/markets/new-jersey/) [Miami](/markets/miami/) [Washington, D.C. - Markets - GlobeSt

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Image courtesy of "Realtor.com News"

Homebuyers Are Discovering the Upside to Bank Failures: Lower ... (Realtor.com News)

An unexpected consequence of the recent bank failures is mortgage interest rates have dropped—and could keep falling.

“Because of the size of the banks that failed and the growing awareness of how the fast-rising interest rates are impacting the financial system, it is possible the Fed could shift course.” “The Fed is caught between its mandate for price stability (i.e., lower inflation) and the necessity of maintaining financial stability in the economy,” Lisa Sturtevant, chief economist of Bright MLS, said in a statement. Higher mortgage rates have caused the housing market to seize up as buyers are struggling to afford still-high home prices along with higher mortgage rates. When there was a run by customers on the bank, it didn’t have the cash it needed and failed. Inflation was running at 6% higher in February than it was a year ago, according to the Labor Department’s closely watched consumer price index released on Tuesday. And there is the potential for them to dip a little lower, especially if there are more bank failures. But buyers might be too spooked by the collapse of Silicon Valley Bank and Signature Bank and the possibility of more turbulence to make what could be the largest purchase of their lives. That would give mortgage rates a little room to dip. “If it’s individual [bank] failures, the real estate market can benefit from the lower mortgage rates,” says Tomas Jandik, a finance professor at the University of Arkansas in Fayetteville. “When there’s any kind of economic uncertainty, mortgage rates tend to go lower,” says Ali Wolf, chief economist of the building consultancy Zonda. Mortgage rates were rising, and it was starting to look bad for home shoppers. But by Tuesday, they were up to 6.75% as the market absorbed the news.

Silicon Valley Bank and Signature Bank collapse may lower ... (Morningstar.com)

By Aarthi Swaminathan. The collapse of Silicon Valley Bank will likely help push mortgage rates down further, experts say. The collapse of Silicon Valley ...

"The direct impact on the housing market is likely to be small. "And maybe they get a little bit of benefit from mortgage rates." The collapse of SVB is the second largest bank failure in U.S. The failures are idiosyncratic, and given the government's decision to pay all depositors, I don't expect there to be a problem in the broader financial system," Mark Zandi, chief economist at Moody's Analytics, told MarketWatch. The joint statement by the Treasury, Federal Reserve, and FDIC added: "We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. Back then, the recession was sparked by subprime lending and a foreclosure crisis. "That could be a parallel situation that we're in now," he added. The collapse of SVB (SIVB), as well as Signature Bank (SBNY) is spooking investors. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth." "Today we are taking decisive actions to protect the U.S. But with the federal government stepping in, the main outcome for the housing market may be lower mortgage rates, which will benefit U.S. On March 13, the 30-year fell to 6.57%.

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Image courtesy of "Bisnow"

Mortgage Rates Drop After Bank Failures In Moment Of Opportunity ... (Bisnow)

The second- and third-largest bank collapses in U.S. history have sent mortgage rates to their lowest levels in months. The swift closure of two major banks ...

[soared](ttps://www.bisnow.com/south-florida/news/multifamily/miami-apartment-rents-vacancy-117716) across the country since 2021, and even with expectations of a softening have only climbed higher in some of the most expensive parts of the country. The 10-year yield was hovering around 4% on March 10, but as of Tuesday afternoon it was sitting [just above 3.6%](https://www.cnbc.com/quotes/US10Y). Soaring prices, followed by sharp interest rate increases, have forced many would-be buyers from the market, driving up rents and continued investor demand for multifamily properties. [for the first time ever](https://www.bisnow.com/national/news/multifamily/rental-housing-development-outpaces-for-sale-single-family-first-time-117756), according to the U.S. [Redfin](https://www.bisnow.com/tags/redfin) Chief Economist [Daryl Fairweather](https://www.bisnow.com/tags/daryl-fairweather) told the publication. [National](https://www.bisnow.com/national) [Multifamily](https://www.bisnow.com/multifamily)View count:

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