Profile picture for SoCal Engr

What are the chances that we can/will see par rates fall to 3.5-to-3.75 on 30yr fixed?

  • August 14 2011 - Black Mountain Ranch
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Answers (7)

Profile picture for blue screen exile
No one expected that we would be in the neighborhood of 4.1% 30yr fixed at this point in time...

It all depends on political and economic "news", and anticipation of such news.

All presently known political and economic issues are already priced into the rates.  But knowing how governments and economic agencies, and data collection/reporting government departments have been acting, we could still be in for more surprises.

But for the demand for low yield MBS bonds to rise that much, something drastic would have to happen to the stock market.  And that would take a fairly significant economic reporting event, like 30% unemployment in Los Angeles, or Germany defaults on government loans, or the U.S. Nukes Great Britain.
  • August 15 2011
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Great point, Clay!   So true.  If it does get that low, and it doesn't last long, which it wouldn't if history was any indication, only a very, very small percentage of people would get it.  

Very few indicatiors point us towards that being possible, much less probably.   Don't count on it. 

I would say the chances are 10 to 1 against seeing it at all.   And 50 to 1 against seeing it for an extended period of time.  
  • August 15 2011
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Profile picture for SoCal Engr

Thanks all for the input. Kind of interesting to try and be ahead of the rate game, instead of chasing it. But, then again, it still seems like chasing.

  • August 14 2011
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Well one can never say never, but I would not place strong odds on it.

In this crazy enviornment, only time will tell.
  • August 14 2011
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Socal, if it did go to 3.5%% would one be able to get it? I ask that because 3.5% 30 Yr would enable many to refinance even if they already did in the last year or two. Once it hit that rate ( or even 3.625% ) loan submissions would be huge on top of what was submitted last week, adding to the lender's pipelines. Since it takes time to add staff to handle the volume the result would be 30 day locks would change to 60 day locks and if pricing is soft at the 30 day lock level, a 60 day lock may put it back up to 3.75% - 3.875%. I remember the first wave of 4% rates, we had a ton of threads from people complaining they had been in UW for 6 months or more at a couple of big lenders trying to get their no closing cost offer and had no idea as to the status of their loan.  
  • August 14 2011
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I just don't see the long term money getting that cheap.  The 30 year auction didn't go well this week.   The cost of borrowing money in the middle range may get cheaper but can't see the 30 year getting that low.
  • August 14 2011
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Profile picture for Bond Street Mortgage
I believe it will be difficult but not impossible.  We have some economic data this week on inflation, and should show it has subsided.  We are near the lows of last Oct/Nov and it will take things to continue deteriorating in Europe and the U.S. for them to break through these levels.
  • August 14 2011
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