Mortgage rates going down

Microsoft AntonyGonz
Jan 5 31 Comments

Prime rates going up but mortgage rates going down

This screenshot is from nerd wallet mortgage rates page

Mortgage rates going down
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TOP 31 Comments
  • New DuQvV7x
    When people stop buying a product, the seller offers a discount to gooses sales.

    Banks are willing to make less profit from a mortgage than they did months ago because demand has collapsed.

    Bad news.
    Jan 5 13
    • Intel &&-9jj
      I’ve never understood this logic. The only thing that matters for making an investment decision is the current and future interest rate, not what it was 6 months ago.
      Jan 6
    • Uber / Eng #muga
      Read up on the trade off between growth and inflation.

      Generally, low interest rates increase growth and increase inflation; high interest rates slow growth and decrease inflation.

      The tricky part for fed is to finding the optimal balance point. Right now, we are definitely geared too much towards growth as spending, income, employment are all at or near their all time highs.

      TL;DR: low interest rate with double digit returns in the stock market sounds great in principle, but ultimately it’s a short term gain at a long term cost (inflation).
      Jan 6
    • Google skillet
      Also reducing interest rates is a very well understood tool in times of recession. With no tool in hand to tide over bad times, feds at this point are mostly sitting ducks to the next downturn.

      If there is a time to raise rates, it is now, not when we are stuck with a downturn.
      Jan 6
    • Intel &&-9jj
      If the interest rate is 1% today, why do you think it inspires more growth today if the interest rate 6 months prior was 5% vs 2%?

      Also, we’ve seen that interest rates can go below 0%, so really don’t understand the logic of jacking up rates too high so you can lower them later.
      Jan 6
    • New DuQvV7x
      We haven’t seen that the Fed Funds rate can go below 0.

      The nuances of the US as the reserve currency is very different from the experimentation the BOJ is capable of.
      Jan 6
    • Intel &&-9jj
      I believe it was around 2013 when 1/3
      of all global government debt was trading below 0% and everything functioned fine. Yen, euro, and franc all went below 0%.
      Jan 6
    • New DuQvV7x
      That’s not the Fed Funds rate though.

      TBill yield rate is a measure of investor sentiment. And short term TBills have been known to trade below 0 in periods of high uncertainty.
      Jan 6
    • Intel &&-9jj
      The point is that they could go below zero and nothing would change, it’s simply market pricing and pretending it’s an issue is a symptom of human psychology.
      Jan 6
    • New DuQvV7x
      The point is, that’s not based on fact. That is opinion.
      Jan 7
    • Intel &&-9jj
      Lol, likewise Lebowski.
      Jan 7
  • Facebook / Eng eidne371
    Weird why is ARM higher rate than 30 year fixed. That makes no sense.
    Jan 5 8
    • Microsoft AntonyGonz
      OP
      I think because of high near term uncertainty.
      Jan 5
    • Uber / Eng
      Rqwx5o

      Uber Eng

      PRE
      Google
      Rqwx5omore
      Means that the market is pricing in further reduction of interest rates
      Jan 5
    • New / Eng greenleet
      @Rqwx5o That doesn't make any sense because fixed rate mortgage can be refinanced if rate goes down.
      Jan 5
    • Facebook Whateverrs
      The yield curve has partially inverted. Short term rates are higher than longer term rates.
      Jan 5
    • Intel &&-9jj
      It means the government (FHA) crowds out private lenders for fixed mortgages.
      Jan 5
    • Microsoft SatyaClaus
      The chart is wrong. 5/1 ARMs are not higher than 30 year.
      Jan 5
    • Quicken Loans Kbzh37
      Good question. These aren’t interest rates, they are APR, which factors in COST as well. ARMS are hella expensive!
      Jan 30
    • Quicken Loans Kbzh37
      ARM interest rates are still lower, don’t worry
      Jan 30
  • General Mills / Data BettyCoder
    Damn 15 year DOWN to 4%? My 15 year @ 2.875 feels good.
    Jan 5 1
    • Microsoft AntonyGonz
      OP
      I got mine for 3.625 about 3 weeks ago :)
      Jan 7
  • Chase Amhit
    Good time to buy/refinance before it goes up again. Houses are sale pending more. People are still buying if the houses are in good location, even with over $1m purchase price. Housing market will come up starting Feb
    Jan 6 1
    • New DuQvV7x
      This is looking at a national issue through the narrow lens of the Bay Area.

      US > CA > SF
      Jan 6
  • Microsoft SatyaClaus
    Volatility in equities is pushing demand to T-bills. 30 year mortgages track the 10 year. https://fred.stlouisfed.org/series/DGS10
    Jan 5 0
  • Intel &&-9jj
    Where are all those posts about the housing market imploding
    Jan 5 0
  • Microsoft / Eng Tier 1
    This means the risk premium banks are demanding for loaning to you on a mortgage vs the risk free rate is going down.

    Therefore banks think you’re less likely to default.

    Good news.
    Jan 5 0
  • Oracle
    IRS

    Oracle

    PRE
    Google, Facebook, Instacart, Twitter, Uber, Air Asia, IBM, Cisco
    IRSmore
    Good.
    Jan 5 0

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