MBS ALERT: Rates Move Higher After Data Release

I wonder how many of these people realize what has happened to rates in the last week and if they will actually close once they see the payment increase. Also, how many of these buyers will actually qualify, and if these are just wealthy investors getting very aggressive. Nice to see positive data, but it is cutting off your nose to spite your face when this just adds fuel to the rate increase fires, seems like heading east looking for a sunset!

I feel like William Wallace at the end of Braveheart.... Need I say more. When will it end?

Well the Fed has all this money put aside to purchase MBS bonds, and now the prices are attractive. So maybe they'll stroll off the golf course later and do something!

This info would seem to be good for rates. It is proof that low rates will turn the housing market. If the Fed gives up now it will crush everything they have done.

I know nothing about this stuff as I am a first time home buyer. Will this cause the rates to significantly jump up again?

Mike - good economic news usually = bad for rates. Fed action to purchase MBS would be good for rates. Like David said...the home sale data SHOULD be proof to the Fed that if they push rates low that people will buy and turn around the housing market. Whether they act on that or not is another miracle in the waiting.

Mike - good economic news usually = bad for rates. Fed action to purchase MBS would be good for rates. Like David said...the home sale data SHOULD be proof to the Fed that if they push rates low that people will buy and turn around the housing market. Whether they act on that or not is another miracle in the waiting.

Is it the rates that helped April sales OR is it the prices of these homes? Is it better to borrow $150K at 5% or $125K at 6%???

I still have people looking for refi their houses. I had one call me yesterday with 6.25% and another at 6.5%. There are still deals to be done, just not as easy to get the guys in the high fives to move as it was two weeks ago.

Be interesting to see how many of these sales are financed and how many are cash investor buyers. A lot of people still trying to refi as well--but rates have already pushed many of them back to sit and wait. Bloomberg has good article about potential for high rates to "stamp out the green shoots"... http://www.bloomberg.com/apps/news?pid=20601087&sid=av5wGKcb_auE&refer=home

So would say that if I'm closing in 23 days it might be a good idea to lock in at 5.5%?

answer: both

Mike, If it were me, I would float. But the most important question is- can you afford for rates to go to 5.75%? 6%? If not, then take what you got, because you shouldn't gamble money you can't afford. Otherwise, you will see low 5s, high 4s again before you close. Just have your LO ready to lock. Hammer

I agree with Hammer, i would float for now.

Would you guys give the same advice (to float) for someone that is 17 days from close? Seems I'm gambling on the fed buying some MBS up ... but what is the likely hood that will happen in the next week to week and a half? My general feeling is that the economy is rebounding. I think Fridays NFP are going to beet expectations. I know in metro Boston the morning commute has become miserable again where earlier this year it was very light.

Any body notice the treasury yield is back down under 3.65%--what's going on--already got .125% in price better at PF--more improvement likely? Stock market has reversed course lower??

Josh, Remember that the world invests based on what they think will happen in the future based on current data. The unknown is if we are in a sharp recovery, stabilization, or flat rebound. Nobody wants to be on the sidelines if a sharp recovery is happening so they put less money into fixed income assets (bonds, MBS, etc....) and rush to stocks, corporate bonds and more risk based holdings. This is the main reason we are seeing mortgage rates move higher (not to mention INFLATION CONCERNS). My opinion is that investors are getting too excited over the recent economic reports. Let's face it, a rubber band can only stretch so far until it comes back. Is our economy simply improving from a very deep and ugly position, that could not reasonably get much worse? A $7.00 steak is still a crappy steak and many times the investors still would buy it because they think it will cost them $11.00 next year. Just because things appear to be improving, they still suck! The reports will dictate the market in the short-term until it can be figured out where the economy is actually at. I wonder why investors get so freaked out over some positive reports, they should look at what these mean historically, perhaps they would remember foreclosures continue to rise, values have not stopped falling, and unemployment is still very high. Glad to hear things seem to be moving in Boston, but I live in Michigan (not east side thank goodness), and I have many relatives who work for subsidiaries or suppliers of that tiny little company called GM! I hate to say it, but we actually need some bad news, or sane thinking!

Hey--can anyone tell me what's going on in MBS--I have .25% price improvement from Provident--is this rally or just see saw trading we've been seeing--trying to salvage a lock extension and the extra .125% puts me at no cost (no profit either) but at least I'm not digging into pocket--please provide guidance--Adam? Matt? Been a couple hours since your last post saying everything was headed higher....

Dead cat bounce?

Dead Cat Bounce is perfect for this stock market. Can anyone say why this market is going up? There is no reason whatsoever.

I agree that there is no reason for the market to be going up. Stock market is up but it makes no sense whatsoever. We are in for another big stock market slide and Re should continue down for some time to come. Here are a few interesting articles to read On commercial real estate: http://www.time.com/time/business/article/0,8599,1901718,00.html?ref on overall debt: http://www.thebarricadeblog.com/?p=1115&ref on foreclosures: http://www.cnbc.com/id/30984467?ref http://globaleconomicanalysis.blogspot.com/2009/05/mortgage-meltdown-more-pain-to-come.html?ref http://www.contracostatimes.com/business/ci_12471284?source=email&ref

http://globaleconomicanalysis.blogspot.com/2009/05/mortgage-meltdown-more-pain-to-come.html?ref This one is scary to say the least. I know it says 58% of OPtion Arms were written in CA but so far 35% of people are behind. What is going to happen when these adjust to their real payments? 50-70% higher...