Positive Housing Numbers Impacting Mortgage Spreads?
The US housing numbers continue to show signs of improvement as more Americans signed sales contracts to buy homes in June than in May, the fifth consecutive month of increases, according to a report released today.
The Pending Home Sales Index rose by 3.6% in June, which was 6.7% higher than the June 2008 numbers according to the National Association of Realtors.
It’s becoming apparent that the current low home mortgage rates along with a large supply of houses listed at low prices are luring home buyers off the fence to put their offers in. This is truly the first bit of continued positive news on housing in quite some time.
The positive home sales numbers in combination with recent good news on the overall recovery of the US economy may be having an impact on the mortgage spread risk premium, which is a major component of the mortgage rates that are offered to borrowers.
Back in January, when the 10-year treasury yield flirted with 2.0 percent, the national average par or even mortgage rates were hovering at about 5.0 percent for a 30-year fixed mortgage rate. This translated to a mortgage spread premium of almost 3.0 percent, which was much higher than its historic 1.5 percent average. Both the economy and the housing markets were still in free-fall mode at that point so the risk factor had to be imputed into the lender’s quoted home mortgage rates.
At present, the 10-year treasury yield is in the 3.5 percent range, with the national average 30-year fixed par rates holding between 5.35 percent and 5.50 percent. That equates to a mortgage spread risk premium at the 1.85 to 2.0 percent level, which is well off the highs of the early part of 2009.
The significantly lowered mortgage spread premium is most likely due to the improved economic and housing environment, and is keeping both home purchase and refinance mortgage rates steady at very attractive levels.
Continued improvement in the housing markets will result in much more stable home appraisals, and help those refinancing to feel a bit more comfortable come application time.
If you are considering a refinance now and need some help, have questions, or need some competitive rate quotes, please check out the popular Refinance Tool Box. Just give a call at 888-850-9888 or fill out a Rate Quote Request online for professional assistance without the aggressive high-pressure sales tactics.
May the Mortgage Refinance Rates be with You!
Refinance Tool Box
The Pending Home Sales Index rose by 3.6% in June, which was 6.7% higher than the June 2008 numbers according to the National Association of Realtors.
It’s becoming apparent that the current low home mortgage rates along with a large supply of houses listed at low prices are luring home buyers off the fence to put their offers in. This is truly the first bit of continued positive news on housing in quite some time.
The positive home sales numbers in combination with recent good news on the overall recovery of the US economy may be having an impact on the mortgage spread risk premium, which is a major component of the mortgage rates that are offered to borrowers.
Back in January, when the 10-year treasury yield flirted with 2.0 percent, the national average par or even mortgage rates were hovering at about 5.0 percent for a 30-year fixed mortgage rate. This translated to a mortgage spread premium of almost 3.0 percent, which was much higher than its historic 1.5 percent average. Both the economy and the housing markets were still in free-fall mode at that point so the risk factor had to be imputed into the lender’s quoted home mortgage rates.
At present, the 10-year treasury yield is in the 3.5 percent range, with the national average 30-year fixed par rates holding between 5.35 percent and 5.50 percent. That equates to a mortgage spread risk premium at the 1.85 to 2.0 percent level, which is well off the highs of the early part of 2009.
The significantly lowered mortgage spread premium is most likely due to the improved economic and housing environment, and is keeping both home purchase and refinance mortgage rates steady at very attractive levels.
Continued improvement in the housing markets will result in much more stable home appraisals, and help those refinancing to feel a bit more comfortable come application time.
If you are considering a refinance now and need some help, have questions, or need some competitive rate quotes, please check out the popular Refinance Tool Box. Just give a call at 888-850-9888 or fill out a Rate Quote Request online for professional assistance without the aggressive high-pressure sales tactics.
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
12:19 PM
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