Posts

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

Rising Housing Payments – In Perspective!

The below chart was circulating on Twitter recently – and it of course made potential homebuyers unnecessarily apprehensive.   Yes, payments have surged, but I want to put this in perspective. Interest Rates: While rates have risen sharply from the lows we saw during the COVID crisis, they are only about 2% higher than where […]Read More

Rates Went Way Down Because Rates Went Way Up (AGAIN)

The Fed raised the Fed Funds rate by 0.75% yesterday as expected, and long-term rates have been falling ever since. I would not beat this dead horse again but for the fact that rates are continuing their slide downward as I type, and because of how important this all is for housing and mortgages. As […]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

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

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

Huge Opportunity From High Rates!

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?

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

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

Is The Fed Trying to Tank The Housing Market – Or Just Slow It Down?

Agents in many of the markets we work in are telling us that they are now finally seeing a slowdown in the market. One agent who lists high-end homes in the Bay Area told me that he “used to tell sellers to remodel their kitchens, update flooring, repaint walls, and spruce up landscaping before listing […]Read More

Rates Back to 2009 Levels; Time for ARMs!

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

Pyramid Lending = Death of Mortgage Banks

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!

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

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

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

The #1 Most Terrifying Factor Pushing Rates WAY UP!

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

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

Why Russia/Ukraine War Drums Impact Mortgages & Real Estate So Much!

Interest rates were trending upward before news surfaced that NATO believes Russia is still likely to invade Ukraine (because so many Russian troops are amassed at the border). When the news surfaced, rates dropped sharply in response.Read More

How Much Have Rates Risen? Will They Fall?

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!

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

What Are Current Mortgage Rates In Texas?

What Are Mortgage Rates Today You can view JVM Lending’s current mortgage rates for Texas loans on our website here. Our team updates these mortgage rate scenarios daily; however, our team is also available seven days a week for any questions or custom interest rate scenarios you may need as you plan your homebuying process. […]Read More

Fed Comments Push Rates Up; Re-Casting Problems!

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

What Is A Conventional Loan?

What Is A Conventional Loan Conventional loans are a favorite for homebuyers with decent credit scores and who have a fair amount of funds for a down payment. Conventional mortgages should not be confused with “Conforming Mortgages.” Conventional mortgages are institutional mortgages that are not insured by the FHA (Federal Housing Administration) or guaranteed by […]Read More

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

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!

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

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

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

How Much Do Higher Rates Affect Payments?

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!

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?

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

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

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

The 6 Forces Driving Interest Rates

  THE THREE FORCES DRIVING RATES The mortgage industry’s primary voice/blogger, Rob Chrisman, recently wrote this: “There are three forces driving mortgage rates these days: uncertainty about the effects of the pandemic drives money to the safety of fixed income securities (mortgage bonds) moving rates lower; inflation fear backed by data moves rates higher, and […]Read More

Why Lenders HATE Jumbo & Why JVM’s Jumbo Rates Are SO LOW

JVM FHA OFFER ACCEPTED OVER CASH OFFER As a brief aside – one of our clients recently had his 14-day-close FHA offer accepted over an all-cash offer – at the same price. Why? The listing agent knew our reputation and knew the appraisal would not be an issue (b/c of comps and b/c our buyer […]Read More

Mortgage Applications Down 30%; What Does It Mean For Borrowers? Refi Boom Coming?

2020 = BEST YEAR EVER FOR MORTGAGE INDUSTRY The mortgage industry had its best year ever last year (over $4 trillion of funded loans), as rates fell to all-time lows and both purchases and refis shot up to record levels. Industry capacity could not come close to meeting demand, and lenders were able to charge […]Read More

The Other Reason Housing Inventory Is So Low (Not What You Think)

In the 1970s, when inflation was out of control, the press was always looking for scapegoats to blame like “middlemen” and “greedy businessmen” when the cause was really at the feet of Fed and Government policy. That is largely the situation today with respect to housing, as Fed and Government Policy – intended to help […]Read More

Will Mortgage Rates Fall Again? What Are The Variables?

I received numerous questions in regard to mortgage rates yesterday, e.g. Will they come down again? Should I lock now or wait? What do I think will happen? As always, my answer was don’t wait to lock in your rate b/c nobody has a clue what will happen. VARIABLES AT PLAY I responded that way […]Read More

Outlook On FHA Mortgage Rates In 2021

The housing market has shown remarkable strength despite the challenges the COVID-19 crisis brought to the economy in 2020. The housing market has made a comeback primarily because of low mortgage rates spurred on by strong demand from homebuyers. FHA INTEREST RATE FORECAST According to NerdWallet’s rate survey, as of January 13, 2021, the average […]Read More

Mortgage Rates Climbing As Predicted; “Average Rates” Are Often Very Misleading

RATES UP 1/4% Yesterday, we were quoting rates a full 1/4% higher than what we quoted as recently as last week. Rates have been climbing despite negative economic news – which normally pushes rates down. This is partially b/c investors expect the negative news to spark more stimulus from Congress which could trigger more growth […]Read More

Three Factors That Influence Your Mortgage Interest Rate

The interest rate tied to your mortgage directly affects how much you are required to pay over the term of your loan. If you are considering purchasing a home, researching the market’s current interest rate is essential. There are three major factors that can influence the interest rate you can lock in for your mortgage. […]Read More

Mortgage Rate Rules Out The Window; Confirmation Bias; Kool-Aid Mustaches, Sting-Rays & Snakes

In the pre-internet days of the mid-1990s, we would call the “Bond Market Hotline” on the telephone (with a cord 😊) several times per day to see how the 10 Year Treasury was performing. This is b/c the 10 Year correlated so closely to mortgage rates. If the 10 Year prices were falling, for example, […]Read More

Stocks Way Up & Rates Way Down – Very Unusual! Why?

The stock market has been on a tear lately, with the Dow Jones index flirting with 30,000. This is amazing b/c the Dow dropped down to close to 19,000 as recently as March when COVID-concerns peaked. What makes the sharp rise in stock prices particularly interesting to those of us in the mortgage industry is […]Read More

Rates Hit Another All-Time Low… Yawn; Why and Will They Go Lower?

Rates edged lower again, allowing me to quote the lowest 30-year fixed-rate I have ever quoted (see our rates here). MARGINAL DROP/MARGINAL HELP FOR CONSUMERS Rates only fell marginally though, so it is not like borrowers with currently locked rates are missing the boat. In addition, b/c the mortgage industry cannot begin to process all […]Read More

Rates Hit Record Lows – Again; Forbearance Effect On Credit

FORBEARANCES, CREDIT, & ABILITY TO GET MORTGAGE FINANCING I recently blogged about how forbearances will affect credit and a borrower’s ability to obtain mortgages, pointing out how borrowers just out of forbearance will have to “season” their forbearance for 3 months before they can get new mortgage financing if they still have a past due […]Read More

How Low Can Rates Go? Not Waiting To Refi

One of the most interesting aspects of the COVID-19 crisis is its effect on interest rates. In “normal” times, mortgage rates correlate closely with the 10 Year Treasury Bond. In other words, when the 10 Year moves higher so do mortgage rates, and vice versa. Also, “the spread” or the difference between the 10 Year […]Read More

3.3 Million Unemployment Claims & Rates UP! Why? Lenders Misleading Borrowers

3.3 million people filed for unemployment last week, shattering the previous record of 700,000 set in 1982. Normally, such news would send rates into a massive downward spiral – but not in today’s world. Rates remain higher primarily b/c of the extra risks involved with mortgages now. These risks are enormous and include job losses […]Read More