Mortgage Rates Up: Pigs Squeal
My friend Mike the Mortgage Man says that his clients are freaking out. "People were waiting for 30-year mortgage rates to drop under 4 percent..." I finished his statement with the obvious: "and now they are screwed!"
Why do people do this to themselves repeatedly? Over and over, they wait to buy the low/sell the high or lock-in mortgage rates at "the lowest rate ever!" It just more proof that "bulls and bears make money, pigs get slaughtered"--and often for not that much difference in cost. Mike says some of his clients were hemming and hawing over an extra $25 per month savings, when "at the rate they missed, they would have been saving hundreds of dollars."
Don't blame the Obama tax cut deal--10-year treasury yields have been marching higher for weeks now and since 15 and 30-year rates key off the 10-year, there has been a spike in those rates. This week, the Mortgage Bankers Association said rising rates are negatively affecting borrower activity. For the week ending December 3rd, mortgage applications declined, due to a 1.4 percent slow down in refinancing. The four-week average for refinancing applications was down 10.9 percent.
The MBA also said that average interest rate for 30-year fixed-rate mortgages increased to 4.66 percent from 4.56 percent the week prior. The 30-year rate has been creeping higher for four straight weeks, and is at its highest since July. 15-year fixed-rate mortgage rates increased to 3.98 percent from 3.91 percent. Mortgage experts note that rates have continued to rise -- this morning, most folks looking to lock-in, can expect to hear something in the neighborhood of 4.75 percent for a 30-year.
Gosh, I could have sworn that I just heard some pigs squeal...
Image by Flickr User The Pug Father, CC 2.0
