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

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usctrojancpa

Well-known member
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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Not true, one of my buyers locked in a 30-year fixed jumbo rate 2 weeks ago at 5.875%. There aren't many people who took 3-5 year ARMs in the past 2-3 years as there was little rate difference between the ARM and 30 year fixed rates.
 
sgip

sgip

Well-known member
Purchase rates have a premium compared to refinance rates - generally .25 or more in rate when comparing a refinance to a fixed product. You can quickly see the difference here: https://www.wellsfargo.com/mortgage/rates/ but like all financial websites, YMMV. Another consideration are seller concessions, etc that can also sweeten the rate but do not apply of course when refinancing. Still, the time to pull the trigger remains "now".
 
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OCtoSV

Active member
usctrojancpa said:
Not true, one of my buyers locked in a 30-year fixed jumbo rate 2 weeks ago at 5.875%. There aren't many people who took 3-5 year ARMs in the past 2-3 years as there was little rate difference between the ARM and 30 year fixed rates.
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That was a good rate your buyer got, but Tom Keane on Bloomberg this morning was squawking about the 7.17% 30 yr on Bankrate and asking his various guests about that number. Liquidity is drying up fast for all but the most qualified W2 buyers, and will dry up even faster once the Treasury has to raise $1T once the debt ceiling bill passes. Anyone buying now at elevated $/sq ft will be very sorry in a few years while those buying in areas showing signs of stress like San Clemente or Coto will wish they had waited for even bigger bargains.

I got a funny solicitation from my mortgage servicer today announcing they have waived all fees for me to take a HE loan for the delta between my current LTV and 80%. Hooray. Of course ne mention of rate, which I'm hearing are sky high for these products.
 
sgip

sgip

Well-known member
That 7.x handle is for any Agency loan product, not Portfolio Jumbo, which for the most part remain in the 6's.

Selling a HELOAN....in this rate environment? YOW! They must be desperate for cash flow. My guess is the rate is in the 9's best case, double digits for most other borrowers. I can see a HELOC being pushed, even with the Prime Rate where it is today, but not a HELOAN. During times like this if you can get a HELOC with a negative margin (Prime, minus X) it's a good time to do so. When and if the Prime Rate is declining you can get cash as needed well below normal costs.
 
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OCtoSV

Active member
sgip said:
That 7.x handle is for any Agency loan product, not Portfolio Jumbo, which for the most part remain in the 6's.

Selling a HELOAN....in this rate environment? YOW! They must be desperate for cash flow. My guess is the rate is in the 9's best case, double digits for most other borrowers. I can see a HELOC being pushed, even with the Prime Rate where it is today, but not a HELOAN. During times like this if you can get a HELOC with a negative margin (Prime, minus X) it's a good time to do so. When and if the Prime Rate is declining you can get cash as needed well below normal costs.
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Looking closer at the letter it was actually a cash out refi they are offering - like I want to lose my one action privilege while I abandon my 1.99% rate. Dream on Lakeview Servicing..

Interesting that you see portfolio jumbos in the 6s - regardless of the Sheri Wang effect they seem to be ticking up.
 
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sleepy5136

Well-known member
Does rates going higher mean anything to housing when unemployment rate is at 3.4% and layoffs are happening to people making 400k+? Not to mention most people have either paid off their mortgages, about to pay it off soon, don't have mortgages, or locked in at a rate < 4%?
 
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talkirvine

Member
If rates go higher, it will reduce liquidity of the whole financial system. No real estate transactions, no lending or borrowing, no credit card transactions...
 
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sleepy5136

Well-known member
i don't think we are anywhere near cutting rates. consumer spending is still strong and unemployment is low. a slow down is needed to get prices back to normal.
 
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CalBears96

Well-known member
sleepy5136 said:
i don't think we are anywhere near cutting rates. consumer spending is still strong and unemployment is low. a slow down is needed to get prices back to normal.
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Not right now, of course, since there seems to be one more rate increase, most likely not the next meeting in June, but the one after that.

I'm talking about cutting rates some time next year, probably around mid year.
 
sgip

sgip

Well-known member
Lot's of people will start talking about how "the Fed always lowers rates during an election..." as I've heard often these past few rate cycles. It's a 50/50 ratio of rate drops and rises and no clear pattern exists. If inflation stays high (as I believe it will) and employment demand stays vigorous, we won't see cuts until 2025. We may be stuck in a long term stagflationary environment and rate cuts won't pack the same sugar high as they may have in the past.
 
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