November 24, 2017

Seattle Real Estate Mortgage Rates Today 8/18/11

Seattle Real Estate Mortgage Rates Today 8/18/11 Where do Seattle Real Estate Mortgage Rates go from here?

This is the #1 asked question we are receiving daily in each and every conversation.  Here is the most up to minute answer we have.  Please note we can only interpret what is happening at the current moment.  On some days by the time we post this to the Mortgage Reel something has changed domestically or globally which has changed everything wiping out what we knew at the time writing the post.  Yes it is that volatile right now.

FEAR & UNCERTAINTY is what is keeping Mortgage Rates at these historic lows.  Many have said that it is because of the Federal Reserves statement of “keeping rates low through 2013″……. HOW? The Federal Reserve at this point in time is helpless in keeping rates low other than saying they will and hoping it will have a sugar pill affect on the market.  Any stimulus that we have seen in the last two rounds of Quantitative Easing has pushed rates higher.  WHY? Because Quantitative Easing drives INFLATION and with concerns of INFLATION it has a NEGATIVE impact on bonds and drives yields and Mortgage Rates HIGHER.  The proof is in the impact of Quantitative Easing 2, within one day of the announcement mortgage rates SPIKED by almost .50%.

So if the Federal Reserve is / has not been able to keep rates at these once again historic levels what is?  FEAR & UNCERTAINTY… coming out of Europe has the GLOBAL market quick to react on ANY news.  And quick reactions has been just that.  Two weeks ago the United States was hit with the biggest financial blow in credibility since WWII as our debts were downgraded.  This happened on a Friday and by Monday the global markets were in a frenzy on how this would impact all who are tied to the U.S..  Here again uncertainty sent global investors piling into the U.S. bond and equity markets as a Safe Haven.  This Safe Haven has been a parking lot for investor funds as we have seen in every global crisis like Japan, the Middle East, Greece and now the EURO.  When the Safe Haven trade is in play, Mortgage Backed securities also benefit in trade which drives yields down and in turn drives Mortgage Rates down.

You have been waiting for it here is the BUT! Mortgage Rates have hit a floor that does not look to be broken.  We are seeing the profit margins for banks higher than we have ever seen even during the times of the mortgage melt down in 2007 & 2008.  These margins are not being passed onto the open market of the home owner and before anyone points the finger at loan originators that can come to a quick NO NO.  We DO NOT see the profit margins either, which is clearly stated on each and every Good Faith Estimate on how a Loan Originator is compensated.

This all comes to the point.  Margins & Profitability are at all time highs for Banks this would be compared to OIL.  Have you noticed that OIL is down to the mid 80’s per barrel and we are still paying $3.70 or so per gallon.  Lets take a look at this, not too long ago Oil was trading at $100 per barrel and gas at the pump was $4.00 or more.  Compare that to today and who is keeping all of the profit.  This is not any help to the consumer at all.  We are not experts but it sure is not helping our pockets.  This is the same as to what we are seeing in Mortgage Rates in relation to pricing.  Mortgage Rates appear to have bottomed out at least where lenders are pricing them for now.

The “PULL BACK” or “SELL OFF” is being speculated by Wall Street, “BOND ARE OVER SOLD”.  Hedge Funds or a large Bond holder like PIMCO begins to make moves to sell, the DOMINO effect happens, and just like that YIELDS spike and everything, long term bonds, treasuries and Mortgage Backed Securities.  Yields moving higher translate to Mortgage Rates moving higher.

The entire market is waiting for any good news to come from Europe and be forewarned that when the news does break be ready for the Safe Haven trade of the U.S. to sell off.  In turn this will pressure rates higher just as we have benefited from the uncertainty to pressure rates lower at this time.

“Note to our readers: The 10 Year bond has no correlation to Mortgage Rates.  Mortgage Rates are driven by Mortgage Backed Securities, we could dive even further into the explanation but here is the bottom line, if the 10 Year bond was in direct correlation to Mortgage Rates we would probably see some insane rate like 2.00%, if this were true.  Please do not be influenced by those who are not professionals saying rates are moving even lower.”

In closing our last point, many have asked if the stock market/Dow Jones has an impact on rates? Yes and No, Depending on what is causing the sell off may send investors in the the bond markets which Mortgage Backed Securities may benefit from.  BUT in a great example like today the Dow Jones is down over 400 and some lenders are repricing margins for the worst taking away borrowers ability to compensate costs.  It is just that complex.

Thank you very much for sending us your questions, we are very committed to keeping you informed and up to date on the most prized investment, your home. “No matter what crap media is trying to say about homeownership today”.  When the market recovers and it will wait to hear what tune they will be singing. LOL.

Timing is everything just as location of the home is critical. Timing in securing an interest rate, BEST rate, is working with a mortgage professional who has their pulse on the market and when best to advise and educate their clients when timing is right. Along with this key knowledge is to be on top of all of the lending and underwriting changes which seem to almost happen daily. We at the Mortgage Reel are Licensed Washington Loan Originators, serving clients with transparency, knowledge and most importantly keeping your goals in mind. How can we assist you today?

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