Mortgage Refinance Rates Holding Steady Amidst Credit Tightening
After the initial bounce up in mortgage refinance rates off the January ultra-low levels, interest rates have remained in a somewhat sideways holding pattern. This is good news for those still on the fence waiting to refinance, because actually, mortgage rates are still at historic low levels.
How long this will last is anyone’s guess, but the renewed state of credit tightening among lending institutions could prove to slant an upside bias onto mortgage refinance rates. The current widening of credit spreads is an indication that lending may be in a restricting phase once again.
In fact, in the face of a rising in the current 10-year Treasury yield, offered mortgage rates have experienced little change. This means that refinance lenders are actually taking a hit to their profit margin in face of the true cost of money. My guess is that this may have to so with a contraction of new mortgage applications following the flood of activity experienced in January and February of this year. It’s all about supply and demand.
I wish there was better news on the home pricing front, but dismal existing home sales and new home starts reports are not painting a pretty picture. It appears that the major buying in the US housing market it being directed toward foreclosed homes and one’s offered at bargain basement prices. This is creating a swift downtrend for housing market values, not only in the previous high-cost risk regional areas, but all across the country.
On the positive side, inflation numbers still remain in check, and believe it or not, Citi Bank actually provided some positive news about it’s profitability through the first 2 months of 2009. We’ll take any bit of good news that we can at this point about the economy.
If the recent Citi numbers are any reflection, maybe the banking community is actually going to come out of this mess as stronger companies, which in turn, will make a better lending environment for us all. I don’t think that we’ll revert back to the easy money mortgage days of years prior, but for people that can fully document their income and have some equity in their homes, refinancing programs may become a bit less restrictive.
Keep an eye on the employment reports and housing sales numbers, as positive news in these areas will be the key to our economic recovery.
May the Mortgage Refinance Rates be with You!
Refinance Tool Box
How long this will last is anyone’s guess, but the renewed state of credit tightening among lending institutions could prove to slant an upside bias onto mortgage refinance rates. The current widening of credit spreads is an indication that lending may be in a restricting phase once again.
In fact, in the face of a rising in the current 10-year Treasury yield, offered mortgage rates have experienced little change. This means that refinance lenders are actually taking a hit to their profit margin in face of the true cost of money. My guess is that this may have to so with a contraction of new mortgage applications following the flood of activity experienced in January and February of this year. It’s all about supply and demand.
I wish there was better news on the home pricing front, but dismal existing home sales and new home starts reports are not painting a pretty picture. It appears that the major buying in the US housing market it being directed toward foreclosed homes and one’s offered at bargain basement prices. This is creating a swift downtrend for housing market values, not only in the previous high-cost risk regional areas, but all across the country.
On the positive side, inflation numbers still remain in check, and believe it or not, Citi Bank actually provided some positive news about it’s profitability through the first 2 months of 2009. We’ll take any bit of good news that we can at this point about the economy.
If the recent Citi numbers are any reflection, maybe the banking community is actually going to come out of this mess as stronger companies, which in turn, will make a better lending environment for us all. I don’t think that we’ll revert back to the easy money mortgage days of years prior, but for people that can fully document their income and have some equity in their homes, refinancing programs may become a bit less restrictive.
Keep an eye on the employment reports and housing sales numbers, as positive news in these areas will be the key to our economic recovery.
May the Mortgage Refinance Rates be with You!
Refinance Tool Box
Labels: business, economy, finance, home loans, money, mortgage rates, refinance, refinance rates, refinancing
posted by Jim Bisnett at
12:34 PM
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