Mortgage Market Update

Welcome to Monday morning.   So what’s moving the market today?

• A report on Saturday in the Wall Street Journal that the banks in the stress test “pushed back” and the government lowered their capital requirements.   In other words, take Bank of America for instance, they got a D- on the stress test, complained to the government and the government changed their grade to a C-.   They still didn’t do very good but it’s better than it was.   Does this really surprise anyone?  With the delays and the leaks, you had to know something was up…..
• Interest rates continue their trend upward because of a couple of things: 1) Some tentative signs that the economy might actually be recovering and 2) The inflationary aspects of the government borrowings and 3) The increase in the price of oil.

So, we’ve bumped up a little bit on rates today.

On Friday, we were at:
5.0% with 0 pts for a 30 year fixed refi
and
4.75% with 0 pts for a 30 year fixed purchase

Today, we’re at
5.0% with .125 pts for a 30 year fixed refi
and
4.75% with .125 pts for a 30 year fixed purchase

Recommendation remains to lock all loans immediately upon application.   The upside risks due to oil prices, market volatility and the risk of inflation are greater than the downside potential is.

I’ll keep you informed as the conditions warrant…..

Tom Vanderwell

Mortgage Market Update