How high will mortgage rates climb in the next 36 months?

irvinebullhousing said:
When you have over 2 decades of easy credit and prolong period of zero interest rates, it will take just as long to right the ship.

If we don't right the ship and reverse or change course, on a couple of bumps on the road, then we are dooom as a country, as a leader of

capitalism. These next few years will be extreme, cross currents from many sides of status-quo, and keeping things the way they are to benefit a few

at very top. I hope JPowell, stay the course,, we can not afford zero interest rate. As far as housing, it has been in reccession since June 2022. There

places fare better than other. Everything will get reprice, My optic for housing in Irvine, so far is that it still has too many people that prefer to live

here than rushing to the exit. Housing is a big part of the CPI. Let's not forget, the landlords suffer the same inflation, labors, material, and taxes

has risen substantially,, many did not even able to collect rents during the rent moratorium and not getting paid.
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FED to maintain higher for longer, that is exactly the medicine that needed.
 
It’s working…

US Previously Owned Home Prices Fall for First Time Since 2012​

  • Median selling price dropped 0.2% in February from a year ago
  • Retreat was driven by price declines in West and Northeast

www.bloomberg.com

US Previously Owned Home Prices Fall for First Time Since 2012

The median sales price of a previously owned US home slid in February for the first time since 2012, offering some relief for buyers still faced with high borrowing costs.
www.bloomberg.com www.bloomberg.com
 
irvinebullhousing said:
FED to maintain higher for longer, that is exactly the medicine that needed.
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Actually, the FED's tone today is a lot more dovish that a couple weeks ago. It sounds like they're going to have another 25 bp raise and then no more, as opposed to 50 bp today and potentially another 25 bp in May and June.

The bank meltdown is pretty much because the FED raised too much too fast. Of course, their mistake was waiting too long to start raising rate. They were reactive instead of proactive.
 
And yet the 30 yr jumbo can now be had for high 5s....I still think spreads are going to widen and mortgage credit will tighten dramatically but so far I have to admit I've gotten it wrong
 
CalBears96 said:
Actually, the FED's tone today is a lot more dovish that a couple weeks ago. It sounds like they're going to have another 25 bp raise and then no more, as opposed to 50 bp today and potentially another 25 bp in May and June.

The bank meltdown is pretty much because the FED raised too much too fast. Of course, their mistake was waiting too long to start raising rate. They were reactive instead of proactive.
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The bank meltdown is because the impacted banks did not properly manage their treasury portfolio. You don't borrow long and lend short in a rising interest rate environment. Trying to blame this on the fed for doing what they told everyone they were going to do is silly.
 
Had everyone had the intestinal fortitude to perp walk a few Bankers and heads of mortgage companies (Countrywide, et al) way back in 2008, there might not be as many problems as we're being faced with today.

Yes, .02 percent drop in prices is hardly impactful. For data nerds, according to the Orange County Association of Realtors (OCAR) website, OC Single Family Detached home prices are down 7.6 percent YOY. That's Countywide, not Irvine specific. ( https://www.ocrealtors.org/ ) - about 1/2 way down the page under "Market Snapshot" BTW.
 
Has anyone notice the 30 yr at 6.5% is now a 300 bps spread over the 10 yr? Is this a sign of banks restricting mortgage credit?
 
Conforming Conventional loans are priced by risk. The Agencies Loan Level Price Adjustments (LLPA's) have risen over the past few quarters. Most of the gain in rate for these loans are due to the LLPA's and not any restriction of mortgage credit. Remember that Banks make Conforming Conventional loans then re-sell the loans to FNMA/FHLMC. They are happy to make these loans as it's a near risk free transaction (in this present environment of zero consequence....) If there was a real "Credit Crunch", non-Agency balance sheet jumbo pricing would not be in the mid 5's, but mid 6's or higher.

PS - per my post on March 24th which showed YOY price reductions at 7.6%, the present YOY decline is 4.50%
 
Not sure how that would be the case. First Republic was a balance sheet lender and not an Agency lender per-se. The loans were made to high net worth individuals and a real plus if they move their $$$ to JPM.

I applied for a Loan Officer job at First Republic in late 2022. FRC had amazing jumbo loans, IO products, and high customer service levels. My primary draw was that they had a terrific 1st Time Home Buyer product with a rate consistently 50-100bps below market rates. I did not get the gig, but now is proof for me to be thankful for all my prayers that God did not answer in the way I had hoped for.....
 
sgip said:
I applied for a Loan Officer job at First Republic in late 2022. FRC had amazing jumbo loans, IO products, and high customer service levels. My primary draw was that they had a terrific 1st Time Home Buyer product with a rate consistently 50-100bps below market rates. I did not get the gig, but now is proof for me to be thankful for all my prayers that God did not answer in the way I had hoped for.....
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Sometimes it works out for the best.

So they got absorbed by JPMorgan right? Not sure if that meant personnel changes but would you have ended up in the Chase mortgage department?
 
Hard to say, given the current level of purchases to support the high number of loan originators. My guess is the FRC LO's are going to need to find somewhere else to work soon.
 
Tick tick tick - jumbos above 7% now. Of course Bankrate is meaningless and Sheri Wang will fly in with the mortgage good fairy and a low rate. Fed is determined to push the long end of the curve up and consensus is emerging the yield inversion is a function of Fed distortion and is not a friable indicator this time.

Wait to buy when rates hit 9% and all the poor souls with 3/1ARMs are blood in the water.

BTW, for anyone that wants to see the impact of the AirBnB bubble popping go look at the massive inventory im Reno that just hit the market. We scored a <$200/nt place there over Xmas to go ride Mt Rose (epic in deep powder) which was an early indicator. Desert inventory starting to bulge as well. After that Mt Rose trip I’m a big fan of Reno - ride 100 days/year with no state income tax and a 4 hr drive from the Bay. They also have their own city ski hill with cheap lift tickets for residents.
 
OCtoSV said:
Tick tick tick - jumbos above 7% now. Of course Bankrate is meaningless and Sheri Wang will fly in with the mortgage good fairy and a low rate. Fed is determined to push the long end of the curve up and consensus is emerging the yield inversion is a function of Fed distortion and is not a friable indicator this time.

Wait to buy when rates hit 9% and all the poor souls with 3/1ARMs are blood in the water.

BTW, for anyone that wants to see the impact of the AirBnB bubble popping go look at the massive inventory im Reno that just hit the market. We scored a <$200/nt place there over Xmas to go ride Mt Rose (epic in deep powder) which was an early indicator. Desert inventory starting to bulge as well. After that Mt Rose trip I’m a big fan of Reno - ride 100 days/year with no state income tax and a 4 hr drive from the Bay. They also have their own city ski hill with cheap lift tickets for residents.
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https://www.bankrate.com/mortgages/jumbo-loan-rates/
 
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