Rates Keep Falling & Will Fall More; Timing The Market

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Rates fell again primarily in response to negative economic data, including revised data that showed the economy shrunk more than we thought in Q1 along with more recession indicators and predictions. The 10 Year Treasury, which correlates closely to mortgage rates, hovered near 3.5% only a few weeks ago – but it is now under […]Read More

Fed Raised Rates & Mortgage Rates Fell – Before Rising Today

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The Fed raised the Fed Funds Rate 75 basis points (0.75%) yesterday, and mortgage rates largely fell in response to the news.Read More

Huge Opportunity From High Rates!

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Grizzled Escrow Officer Sets Me Straight! While aimlessly wandering the hallways lamenting the industry slowdown, I ran into a very grizzled escrow officer who runs the title company next door. She is one of those utterly fearless women who has been around forever and has literally seen it all. She handled George Washington’s escrow when […]Read More

Goldman Sachs Still Buying Homes; Rates Dropped The Most In 2 Years Last Week – Why?

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Goldman Sachs-Backed Funds Bought Entire Housing Development I saw this recent New York Post article on Twitter yesterday and thought it would be another nice share for any potential buyers who might have cold feet. TLDR: Two Goldman-backed ventures just spent $45 million to buy up an entire housing development in Florida. The big funds […]Read More

What If Rates Don’t Fall? WRAP-AROUND MORTGAGES

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“… I remember my first mortgage back in 1982, when my rate was 15%!” said every boomer ever… “… I remember my first mortgage back in 1982, when my rate was 10%!” said my law school professor… The above two comments are huge reminders that homes still sell in even the highest of interest rate […]Read More

Barry Speaks! Fed Disdain; Recession & Low Rates Coming; Housing Will Be Fine

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Barry Habib reminds us that it is inflation that is driving higher rates, but that it will peak in October and start to fall for two reasons: (1) today’s higher rates are destroying demand across the board (I again suggest watching the video for his full explanation); and (2) supply chains will be untangled and working by then, eliminating shortages.Read More

Why Housing Prices Will Double In 6 Years; No Bubble Here…Part 37

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Interestingly, Barry Habib (MBS Highway Founder), Ken McElroy (famous real estate investor), and some dude on Reddit all recently made the case for much higher housing prices – DESPITE HIGHER RATES. And all of them were responding to all of the housing bubble fears we see everywhere now on social media and in the press. […]Read More

History of Interest Rates; Some Perspective

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Are Rates High? Yes, rates are 2% higher than they were when they bottomed out after COVID hit and they are back to the 2009 levels, but are they “high?” No. Not even close when we look at the history of rates over the last 50 years. Here is a link to an excellent interactive […]Read More

Rates Back to 2009 Levels; Time for ARMs!

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Mortgage rates have climbed to their highest level since 2009! One way to combat the rise in rates is to take an ARM instead of a 30-year fixed-rate loan.Read More

Points, Discount Points, & Origination Fees – Avoid Them In 2022!

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Even though distinctions can be made, Points, Discount Points, and Origination Fees are effectively the same thing, and they are used interchangeably. A “point” typically represents 1% of the loan amount. So, a 1/2 point is 1/2% of the loan amount, and so on. Paying a full point will typically “buy down” an interest rate […]Read More

Pyramid Lending = Death of Mortgage Banks

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During boom times, when there is excess business and margins are fat, “pyramid lending” can work. But – when business slows and margins compress like what has been happening this year – pyramid lending not only does not work, it will kill off many mortgage banks. This is because borrowers can shop for rates and apply for loans more easily than ever nowRead More

17 Day JUMBO Financing – With No Contingencies & Super Low Rates!

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I often blog about how jumbo rates are as much as 1% LOWER than conforming rates and explain why too. This recent blog is just one example. Our Jumbo Niche I obsess with jumbo financing not only because it offers astoundingly low rates, but also because it comprises as much as 75% of all financing […]Read More

Jumbo Rates Remain FAR LOWER Than Conforming & FHA Rates

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Mortgage rates have climbed by about 2% over the last six months! Jumbo rates, however, have climbed much more slowly – and they are now almost 1% LOWER than conforming (Fannie Mae and Freddie Mac) rates! What Is A Jumbo Loan? Once again, a jumbo loan is any mortgage loan that exceeds the conforming (Fannie/Freddie) […]Read More

8 Ways to Lower Debt Ratios When Rates Are Climbing

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With rates rising so quickly, “debt ratios” are becoming a major issue for many borrowers. Hence, I am repeating this past blog where I set out various ways to lower debt ratios in order to still qualify in a market with rising rates. Also, in case anyone is interested, I explain what debt ratios are […]Read More

Why There Is Still No Housing Bubble

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Everyone Thinks Higher Rates Will Kill The Housing Market We shared this blog, Higher Interest Rates Did Not Slow Housing Appreciation; Why?, with our database in our monthly newsletter a few weeks ago, and I got this response from a past borrower: “You really think that if the Fed raises rates seven or eight more […]Read More

How High Will Rates Go Before Falling? What Will Be The Catalyst?

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“The 10 Year Treasury yield will be north of 4% by the end of the year.” So says Joseph Wang, a former Federal Reserve insider and monetary expert, who was on today’s Forward Guidance Podcast. The 10 Year Treasury yield is around 2.6% as of the writing of this blog. 10 Year yields dipped as […]Read More

Fastest Rate Increase Since 1981; Will Recession Lower Rates?

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The Fed has engineered the fastest increase in mortgage rates since 1981 – as rates have nearly doubled over the last several months. And, interestingly, housing continues to appreciate for the usual reasons we cite often: (1) inventory remains at record low levels primarily due to a lack of building, not demand, since 2008; (2) demand remains stronger than ever primarily as a result of demographics or millennials hitting homebuying age; and (3) affordability has not been affected as much as people think because incomes have risen with inflation.Read More

There Is No “One Rate” or “A Rate”

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I have been hearing news reporters and commentators say: “…the Fed raised ‘the rate,’” over and over, as if there is a single interest that the Fed has the power to control. As a related aside, borrowers also often ask us: “What is your rate?” – as if there is one rate for borrowers too, […]Read More

Make Sure You’re Offer-Ready! Check In On Rates & Your Pre-Approval Before Making An Offer

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We like to periodically remind homebuyers to reach out to their lender to check their mortgage pre-approval before making offers, as interest rates are changing rapidly in today’s hot market. Many homebuyers are caught off guard during their homebuying journey when they realize that the interest rate lenders quote during the pre-approval process is not […]Read More

Why Higher Rates Could Save The Housing Market

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One of the biggest issues facing the housing market today is a lack of inventory. And, ironically, the very rate increases that many fear will tank the housing market may actually save it. Redfin reported that investors purchased 18.4% of all residential real estate in Q4 of 2021. 3/4 of those purchases were “all cash.” And 3/4 of those purchases were for single-family homes too.Read More

The #1 Most Terrifying Factor Pushing Rates WAY UP!

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We have all been hearing about Quantitative Easing (QE) and the Fed’s Balance Sheet for years now – without really understanding what it is or its effect on the market. QE is where the Fed buys up both Treasuries and Mortgage-Backed Securities (MBS) in an effort to keep rates lower than they otherwise would be […]Read More

Recession Coming Soon – Will It Bring Down Rates?

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Barry Habib of MBS Highway fame was recently on the National Real Estate Post, discussing interest rates because that is what he does. Once again, I love quoting Barry because he has been one of the most accurate prognosticators in the vast realm of economic punditry. Also, his 20-minute interview is not behind a paywall, […]Read More

Why Did Interest Rates Fall After The Fed Ostensibly Made Them Rise?

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The Fed recently raised rates, but interest rates fell in response. This is something we see so often that I had to blog about it – to again allay some of the confusion about the Fed’s rate increases. Rates are way up now, but recently they fell at least 1/8% AFTER the Fed announced the […]Read More

Why Do We Quote Rates With Points – When We Dislike Points?

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On Tuesdays, we send out an email to our entire database that says “What’s Going On With Rates?” And – in that email, we share numerous rate quotes – and several are quoted at the cost of 1/2 point. In response to that email though, an agent we have known for years asked me why […]Read More

Higher Interest Rates Did Not Slow Housing Appreciation; WHY?

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A surge in home prices continues despite the fact that interest rates have climbed significantly – and will likely continue to climb at least in the near term. So, the question is, why do prices continue to surge in the face of higher rates? Two Reasons: (1) High demand because of demographics; and (2) Low inventory.Read More

Inflation & Rates Increase But Industry Experts Still Bet On Low Rates

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The current surge in commodity prices such as wheat, nickel, copper, and oil is fostering doom and gloom predictions – of mass shortages and runaway inflation. So, in light of that, why is Raoul Pal, the founder and CEO of “Real Vision” buying bonds in a bet that interest rates will fall? Pal thinks higher prices will crush demand and that a recession is looming.Read More

Rate Match Guarantee! Beware of POINTS! Rates: Sticky Down/Slippery Up

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We now have a Rate Match Guarantee at JVM. If borrowers bring us a valid rate quote on a formal Loan Estimate before their rate is locked, we will match that quote. Our only exceptions will be for some portfolio jumbo loans offered by some of the major commercial banks.Read More

How The Ukraine/Russia War Is Impacting Rates

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I wrote a blog last week about the potential impact that a Russian invasion into Ukraine would have on rates, and it was one of my most viewed blogs ever. In light of that interest, I am doing a brief follow-up blog to review what actually happened in light of the invasion yesterday. IMPORTANT NOTE: […]Read More

Attention Nervous Homebuyers: Rates Likely to Fall! Dr. Lacy Hunt Explains

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Even though rates are still lower than where they were in 2018 (and for much of the last 10 years), homebuyers are still often very upset that rates have climbed so much in recent months. We frequently remind readers that homebuyers stress too much about rates in any case because so few of them keep their loans as long as they think they will (usually less than 7 years).Read More

$40,000 Dog! Rates Hit 3-Year High! Mortgage Stocks Might Be A Buy – Now :)

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Rates Hit 3-Year High! That was the headline in the WSJ today – so I want to remind agents and borrowers alike to get “Re-Approved” because higher rates mean higher payments. Read More

When Will Rates Fall?

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I had an acquaintance who was a very successful regional homebuilder in the 1990s and early 2000s. By early 2005, he was so certain we were in a housing bubble that he started to short the major homebuilders (Lennar, Toll Brothers, Pulte, etc.). By “shorting,” he was betting that stocks would fall.Read More

How Much Have Rates Risen? Will They Fall?

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Last year at this time, the average conforming 30-year fixed-rate was about 2.7%, per Freddie Mac. Currently, the average conforming rate is over 3.7%. So, rates have risen a full 1% now over the last 12 months.Read More

The Fed Does Not Set Interest Rates! I Got Slapped Down Twice!

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This is a quick reminder that the Fed does not set long-term interest rates! The Fed only sets the short-term “Fed Funds” rate– or the rate that banks charge each other to borrow money overnight. The Fed can influence long-term rates with its comments, with its partial control over the money supply, and with its […]Read More

Eliminating PMI – With Appreciation, Paying Down Loan, or Refinancing!

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A client who bought in 2019 emailed me this week, asking how to get out of PMI. Because appreciation has been so massive over the last few years, there is no reason anyone should have kept their PMI in place for more than two years.Read More

How Credit Scores Affect Mortgage Rates; Real World Examples

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We recently had an agent scream at us (yes, scream) because of the rate we quoted to her client. Our rates of course are notoriously low and we also are not allowed to quote different rates to different clients. As I remind readers often in this blog, there is "no one interest rate for every borrower" because there are so many factors that influence every borrower's rate.Read More

Fed Comments Push Rates Up; Re-Casting Problems!

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Interest rates shot up again yesterday, as the Fed indicated that it may increase the Fed Funds rate faster (as much as 1% this year) than previously anticipated. The Fed also implied that it would stop buying mortgages and bonds (via “Quantitative Easing”) which would put further upward pressure on rates. Read More

Jumbo Rates – Almost 1% LOWER Than Conforming; Going For Jumbo!

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I actually blogged about why jumbo rates are so much lower than conforming rates in April, and here are some of the other reasons: (1) Jumbo loans have stricter guidelines so they are less risky; (2) Jumbo loans have tighter appraisal requirements – again impacting risk; (3) Big banks that fund or buy jumbo loans are desperate for yield and will take what they can get; and (4) Jumbo lenders want to establish relationships with well-off borrowers and will fund loans at a loss in pursuit of those borrowers.Read More

Rates Hit a Two-Year High – And We’re All Going To Die!

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Rates shot up again yesterday – in response to increased concerns that the Fed is going to more aggressively try to push up rates in March in an effort to fend off inflation. Perspective, Baby! As a result, rates hit a two-year high! So, I want to put this in perspective. And – no, I […]Read More

How Will The Stock Market Crash Impact Real Estate?

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I ❤ Real Estate I frequently tout real estate as an excellent investment for the following reasons: (1) it is a great inflation hedge; (2) there is an inventory shortage due to a lack of building, and not due to excess demand; (3) homebuying demographics are surging in sharp contrast to 2008; (4) buying is […]Read More

Will We See Negative Interest Rates In America? (Hint: We Already Are)

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Mortgage Rates Are More Of A Gift Than Ever! I often write that the market’s very low interest rates are a gift because they are so low by historical standards! (and it’s true) And, they are more of a gift than ever before now, despite the fact they have risen by 1/2% since last summer, […]Read More

Why You Can’t Get Yesterday’s Rate, Stock Price, or Bitcoin Price

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My Angry Phone Call With Jeff Bezos! I recently called up Jeff Bezos last week and that he sell me Amazon stock for $6 per share because that was the price in October of 2001, when I wanted to buy 10,000 shares … but didn’t. I then explained to him that my $60,000 investment at […]Read More

How Much Do Higher Rates Affect Payments?

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Recently, I facetiously wrote a blog about why rising rates would crash the housing market, pointing out that they actually won’t 😊. So – because of yesterday’s blog and because rates shot up again this morning – I wanted to remind everyone of just how little rate increases of less than 1% affect someone’s payment. […]Read More

Why Rising Rates Will Not Crash The Housing Market!

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Rates rose another 1/8 to 1/4 percent over the last few weeks and are now almost 1% higher than 2020’s lows. (as a sidebar, they are about where they were last March…so they are not THAT high) But, whenever rates do start to rise in a hurry, I invariably see pundits explaining how rising rates […]Read More

Fed Announces 3 Rate Hikes… And Rates Dropped! WHY?

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The Fed sent the markets into a tizzy recently, finally admitting that inflation is now a serious problem and that there would likely be as many as THREE RATE HIKES in 2022. The bond and mortgage-backed securities (MBS) markets reacted negatively, and every lender announced a series of mortgage interest rate increases as a result. […]Read More

Jumbo Loan Rates 3/4% LOWER In California and Texas

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The Jumbo vs. Conforming Difference Widens! As of the date of this blog, December 13th, 2021, the rate for a $1 million jumbo loan at a 1/2 point cost is 2.5%. The rate, however, for an $800,000 “high balance conforming loan” at 1/2 point cost is 3.25% (3/4% HIGHER than the jumbo rate). These quotes are for […]Read More

Mortgage Rates Do Not Equal 10-Year Treasury Rates

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The 10-Year Treasury Yield dropped almost 4/10% recently – so why didn’t mortgage rates drop that much? The 10-Year Treasury yield (interest rate) is a reflection of what it costs the government to borrow money and is perhaps the most influential interest rate/yield in the world. Hence, when the 10-Year yield drops, the media will […]Read More

When Interest-Only Loans Are A Good Idea

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INTEREST-ONLY “STIGMA” An “interest-only mortgage,” as the name implies, is a loan where the payments include only accrued interest – and no principal paydowns or amortization. Such loans had an enormous stigma for years because interest-only (I/O) loans were far more common prior to the 2008 meltdown and because so many of the loans ended […]Read More

Why Are Rates Not HIGHER – With Inflation, Fed Tightening, & Economy Improving?

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HORRIFIC SPACE SHUTTLE CRASH On January 28th, 1986, the entire world watched the Space Shuttle Challenger explode and crash to the earth – on live TV. Seven people lost their lives, including school teacher Christa McAuliffe, right in front of our eyes and – everyone wondered what the hell happened? The talking heads in the […]Read More