Anyone have any insight on where mortgage rates are going?

[sd900climber]

My wife and I just finished building a house and we are looking to close. Three weeks ago I could have got a 5.25% interest rate, but the house wasn't done so we couldn't.

Today, the lowest I can get is 6.125%. This is a SD Housing First Time Homebuyers rate.

Conventional rates have gone up this week to 6.625%.

So my question is are rates going to continue to go up or will the ease slight in the next month or so????

Thanks for your help.

 

[JDKZRT]

one word .......... up
Spreads (Bank prime vs. gov't prime) are already increasing.

 

[Himark]

I watch them closely and a 2 weeks ago they spiked at 7! then the next following days dropped daily to 6-6.2 and that has been where they have been hovering. Keep in mind 6-7% used to be and still is IMO a damnnnn good rate. we have been spoiled by the 5% and even in some case 4 % money.

 

[Himark]

BTW, I would not hesitate in locking a rate in the low 6% money and never look back. IF rates were to fall it takes a full 1% difference to make a refi worth it so do you really think you will see low 5% money again. I dont think we will for a very long time, But I doo think you will see 7%-8% very soon. You will then be glad you got that 6.

 

[sd900climber]

Thanks for the comments guys. Anyone else have any thoughts?

 

[redlineguy]

My Gut says they will drop, The Gov needs the housing market to be strong so????

 

[dmkhnr]

My Gut says they will drop, The Gov needs the housing market to be strong so????

They will drop like rock. The problem is Qualifying.

 

[sd900climber]

They will drop like rock. The problem is Qualifying.

The problem isn't qualifying. The problem is I need a crystal ball to know which direction they are headed.

 

[sd900climber]

What does the Fed cutting the key interest rate do? Anything?

 

[JDKZRT]

What does the Fed cutting the key interest rate do? Anything?

Key interest rate (which btw dropped .5% in the US today) is the rate at which the banks do business with the Fed. Bank prime is the base rate at which banks do business with Joe Schmoe (you and me) at.
Before the chaos started last month, a key cut by the Fed was used to affect the US economy (like entice Joe Schmoe to buy a new truck, because his payment would be less) because the banks would pretty much automatically pass this cut along to their customers. Now that the banks are up sh!t creek... they are generally NOT passing these Fed. cuts down to their customers..... they are using them to pad their balance sheet. This is what I meant by the 'spread is increasing' above. From all forecasts I have seen, Bank Prime is not likely to go down.

 

[BuffriderNP]

The problem isn't qualifying. The problem is I need a crystal ball to know which direction they are headed.

Its very different qualifying anymore 20% down and great credit score. No more stated income ,so if you've owned a biz that you tried to cover up earnings for tax reasons then your screwed. Like me!!

 

[Himark]

Key interest rate (which btw dropped .5% in the US today) is the rate at which the banks do business with the Fed. Bank prime is the base rate at which banks do business with Joe Schmoe (you and me) at.
Before the chaos started last month, a key cut by the Fed was used to affect the US economy (like entice Joe Schmoe to buy a new truck, because his payment would be less) because the banks would pretty much automatically pass this cut along to their customers. Now that the banks are up sh!t creek... they are generally NOT passing these Fed. cuts down to their customers..... they are using them to pad their balance sheet. This is what I meant by the 'spread is increasing' above. From all forecasts I have seen, Bank Prime is not likely to go down.

EXACTLY correct....

The feds are saying the banks are not doing there part and loosening up the money..they are still keeping a tight reign on it.


Btw since you posted this yesterday your rate has went up a qtr. point. If you are looking at a crystal ball you better make a decision...if you are that worried bout the rate buy a point.