Why can’t automated answering services at mortgage companies be more like the one at Nestle Crunch’s Hotline at 800-295-0051? When asked if you want to continue in English or Spanish, just wait for about 10 seconds, listen to the options and press “4”. Listen to the options again, and then press “7”. (It is worth trying a few times if the line is busy.)
“I know what you’re thinkin’
We were goin’ down.
I can feel the sinkin’
But then I came around.”
What do the Foo Fighters know about mortgage banking? Maybe not much. But bond prices have certainly moved higher (and interest rates lower) since New Years, as has the stock market. According to one trader, the 10-yr note “caught a bid” on speculation that the Fed will leave rates low for an extended period of time. Interestingly, the odds of that happening have been dropping, and now the futures market is pricing in a 79% chance that the Fed will keep rates somewhere between 0% and .25% through April. After hitting 3.91% last Thursday, we’re back down to 3.77% this morning (mortgages prices are better by about .125).
Another story making the rounds is that the Fed may/will continue to buy mortgage-backed securities after its self-imposed March deadline if needed (the release of the FOMC minutes may help shed some light on this). Lately, most of their interest has been 4.75%-5.125% mortgages. Regardless, when you combine continued buying by the Fed, along with some interest shown by banks & servicers, with slowing supply (some mortgage banks are crying for new locks), the laws of supply and demand come into play and the prices go up.