Tag Archive for: interest rates

When Great Economic News Is Actually Bad News

I Was Slapped in the Face With Very Good Economic News! For months now, I have been explaining how weak our overall economy is and why that portends much lower interest rates in the near future – no matter what the Fed does. I of course was just repeating what Jim Rickards, Jim Rogers, Stephanie […]Read More

Fannie Mae Made Rates WAY LOWER for First-Time Homebuyers!

In mid-November, both Fannie Mae and Freddie Mac made homebuying ridiculously less expensive for many, if not most first-time homebuyers! And – I was remiss for not blogging about it sooner. 13 Factors That Impact Your Interest Rate! I often blog about the 13 Factors that impact someone’s mortgage rate – reminding readers that there […]Read More

THE BIGGEST PROBLEM IN REAL ESTATE Right Now – And How To Overcome It!

BARRY HABIB HATES CNBC’S DIANA OLICK! Mr. Habib is one of the macro pundits I cite very often because he is correct so often. “Hate” may also be too strong of a word, as Mr. Habib is very professional, but he clearly has tremendous disdain for Ms. Olick – and this is why: Ms. Olick […]Read More

Much Lower Interest Rates By March; Why & What It Means

On Thursday, CPI (inflation data) came in lower than expected – and we saw one of the largest one-day rate drops ever. I of course blogged about it here: THIS IS HUGE! Inflation & Rates PLUMMET. My biggest takeaway though wasn’t just that inflation and rates dropped; it was to point out how correct the […]Read More

THIS IS HUGE! Inflation & Rates PLUMMET!

Inflation Came In Cool – Exactly As Barry Habib And Jeff Snider Predicted! In 2021, I told a group of mortgage bankers at a lunch how and why rates were going to shoot past 7% in 2022 – and NONE of them believed me. Despite their pushback, I remained very confident in my position because […]Read More

How Interest Rates Impact Home Values (Not What You Think)

“Jay, How Naïve Are You?” That was the response I got from a past client last spring when I was noting how higher interest rates had not yet impacted home values. I made the further mistake of saying I was not sure how much higher rates would impact values too, in light of all the […]Read More

The Fed Did NOT “Raise Rates 3/4% Yesterday” – Deflation/Lower Rates Coming Soon Part II

The Fed raised rates 75 basis points or 3/4% yesterday – so my rate quote at the bottom of this blog went from 6.0% yesterday to 6.75% today. FALSE!! THAT DID NOT HAPPEN! My rate quote today is the same rate as yesterday’s even though the Fed “raised rates 3/4%” yesterday. I typed the top […]Read More

Why I Am Convinced Rates Will FALL By March

I have myriad acquaintances in the mortgage industry (mortgage bank CEOs even) who insist rates will continue to rise throughout 2023. They tell me I am crazy to think they will fall as early as March – with inflation surging and the Fed on the warpath. They further tell me that the Fed cannot get […]Read More

The Beauty of BUYDOWNS – To Lower Payments & Save Deals

In Friday’s blog, I explained why ARMs are NOT the solution for payment relief (because ARM rates are so close to 30-year rates) in today’s high-rate world. BUT – there is another solution for payment relief that is nothing short of awesome: TEMPORARY RATE BUYDOWNS, aka 3-2-1; 2-1; or 1-0.5 buydowns (NOTE: these are NOT […]Read More

Why ARM Rates Are So Close to 30-Year Rates

Apparently, in 2002, it was “Hot In Herre” – or at least it was according to Nelly. I, however, had no idea because I had never heard the song, and I probably wouldn’t have trusted Nelly’s assessment in any case, given his inability to spell. I bring that up though because yesterday’s rates hit 2002 […]Read More

Are Home Equity Lines (HELOCs) Still A Thing?

The Prime Rate today is 6.25% – a full 3% higher than where it was last year at this time. Prime Rate is the rate that commercial banks charge their most creditworthy customers, usually large corporations. It matters to us though because it is also the rate that most Home Equity Lines of Credit (HELOCs) […]Read More

Why Are Banks Not Paying Higher Rates for Deposits? Why Did Rates Plummet Today Too?

Why Interest Rates Are Rising Everywhere – Except Your Savings Account That was the headline from this recent WSJ article. Back in the 1980s, a general lack of savings in America was one of the many reasons why America was going to collapse, and we were all going to die… This was ostensibly because Japan […]Read More

Are Rates Really Over 7%? Not Really; Rates Up 2% Since August; Surveys Lag Market

Today’s average interest rate is 6.82% per Mortgage News Daily (about 1/2% higher than where they were last week). The average is up almost 2% from early August when it bottomed near 5% – amazingly. The average rate was in fact over 7% yesterday, but they plummeted today (and I will explain why below). The […]Read More

The Fed Raised Rates And Something VERY UNUSUAL HAPPENED!

The Fed raised the Fed Funds Rate yesterday by 0.75% and long-term rates actually increased (a lot) after the announcement. This is very unusual for several reasons: The markets had long anticipated the 0.75% hike and had “priced it in” already. The Fed only controls short-term rates and not long-term (30-year fixed) rates, so long-term […]Read More

Investors Dumping Inventory vs. Mortgage Rate Lockdowns!

BIG PROBLEMS AHEAD FOR REAL ESTATE INVESTORS! That was the title of this tweet from Nick Gerli, a real estate guru on YouTube. He said: “The 6-month US Treasury now yields…the same as Buying & Renting Out a House in America…Translation: Big Real Estate Investor selloff coming. Especially among Wall Street owners.” And, in response […]Read More

Rates at 2008 Levels! When Will Rates Fall?

Mortgage Rates Top 6% for the First Time Since the 2008 Financial Crisis The above is a WSJ headline for this article. Rates are also back to where they were … way back in June and somehow we survived July and August 😊 Rates shot up this week in response to higher than expected inflation […]Read More

Inflation Drives Interest Rates – Except When The Fed Gets Involved

As most people know, inflation drives interest rates because investors do not want to accept yields that are lower than the inflation rate because they will effectively be losing money if they do. If you loan somebody $1,000 for one year at 5%, and inflation is at 8%, at the end of the year, you […]Read More

Fed: “We’re Going to Beat The Shit Out Of You Until Inflation Goes Away”

Fed Chair Powell spoke today in Jackson Hole, Wyoming, in a much-anticipated speech – and it roiled the markets. Here is a brief summary in case readers are interested. CONTINUED RATE INCREASES/0.75% HIKE LIKELY. Powell implied that the Fed is going to continue raising rates aggressively, despite “some pain to households and businesses” (hence my […]Read More

Free Refis Aren’t Free

An agent recently told us he only refers his clients to “one loan officer” because that loan officer “offers a ‘free’ refi to all of his clients in 6 months, if rates fall.” We tried to explain to the agent that there is no such thing as a free refi, and that every lender in […]Read More

History Of Interest Rates Part II (50 Years; 1 Year); Perspective Again!

Several agents have recently requested updates to the History of Interest Rates/Perspective blog I wrote in early May. They of course want to show clients that today’s 4%-ish (jumbo) and 5%-ish rates are really low by historical standards – which is a point I make often. There are two charts below: one shows mortgage rates […]Read More

China’s Banking System Collapse Is Terrifying; Why It Matters

EVERYONE IS FOCUSED ON “FED DAY” – which is the day of the month (today) on which the Fed announces its latest increase in the Fed Funds Rate (expected to be 0.75%, and the market has “priced it in” already). BUT – there is an economic issue brewing overseas that is 100x more momentous and […]Read More

If High Rates Bring Down Housing Prices, Will Low Rates Push Prices Through the Roof Again? Inflation Too!

If higher rates are the sole reason the housing market is softer, will the soon-to-be-here lower rates push prices through the roof again? If that is the case, it is one more reason to buy now to take advantage of today’s slower market, knowing that a refi into a much lower rate is very likely.Read More

Is Inflation “Over?” (and boy does it matter!)

Inflation Is Here To Stay! (or not) After telling us that inflation was transitory or temporary for months in 2021, many if not most economists changed their tune and declared that inflation was here to stay. This is why the Fed changed course so quickly and aggressively this year, and it is largely why interest […]Read More

The “Fed” Does NOT Control Mortgage Rates

The Fed controls the short-term “Fed Funds Rate,” or the overnight rate that banks charge each other. The Fed does NOT control long-term rates like the 10 Year Treasury or 30-year mortgage rates. The Fed can influence long-term rates with its comments and by raising the Fed Funds rate, but it does not have the final say.Read More

Rates Keep Falling & Will Fall More; Timing The Market

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

Good News! Recession Coming Soon; Rates Continue to Fall After Fed Raises “The Rate”

A week ago, I pointed out how the recent 0.75% increase in the Fed Funds rate resulted in LOWER long-term rates. I highlighted three reasons for this: (1) The markets perceived the news as effective inflation fighting; (2) the markets expected the news and had priced it in already; and (3) the Fed Funds rate […]Read More

Why The Fed Desperately Wants to TANK the Housing Market!

One of my favorite macro pundits, Alfonso Peccatiello (former $20 billion fund manager who goes by “Alf”) recently tweeted this: “The biggest group of consumers in the US owns houses, not stocks. And this is why taming the animal spirits in the housing market is paramount important for the Fed. And they will succeed…” He […]Read More

Fed Raised Rates & Mortgage Rates Fell – Before Rising Today

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

High Rates; Softer Market; ARMs; Housing Shortages; Recessions; Refis

Highest Mortgage Rates Since 2009 Last week’s sky-high inflation numbers have pushed 10-Year Treasury rates to levels we have not seen since 2018. While mortgage rates are at levels we have not seen since 2009. Beating A Dead Horse – Again The fast-climbing rates and media rumblings continue to spook buyers – so I am […]Read More

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

“… 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

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

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

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

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

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

Why There Is Still No Housing Bubble

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

Why Heejin & I Turned Down $10 Million

We know a loan officer with a large team who does about half of JVM’s volume – and he was offered a $6 million “signing bonus” to move to another mortgage bank. He turned it down, however, and remained where he was (I will explain why below). With higher rates and refis all but dead, […]Read More

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

“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

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

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

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

Recession Coming Soon – Will It Bring Down Rates?

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?

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?

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?

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

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

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

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

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 :)

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?

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