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WHAT IN THE HECK IS GOING ON WITH MORTGAGE RATES?

Not going lower. They are skyrocketing. The CEO of one of a Mortgage company posted this to explain. It’s great info and easy to digest.



Question: I hear US Treasury Bonds are at Record low yields, shouldn’t my mortgage rate be lower?


Mortgage rates are determined by the price of Mortgage-Backed Securities (MBS). MBSs have their own market where prices are determined by supply and demand. Over the past week, the supply of MBSs has overwhelmed demand, causing the value of MBS’s to drop. When the value of MBS drops, mortgage interest rates move higher.

Question: Is the Government doing anything to bring rates back down?


The Federal Reserve Bank has pledged to buy US Mortgage-Backed Securities (MBS) to stabilize the MBS market. While rates may fall back to early March lows, it is unclear whether supply will overwhelm demand again as it did last week.

Question: What can I expect in the coming weeks?


The Covid-19 Corona Virus has introduced new risks to the entire economy which makes all of the markets unpredictable. Please be patient with us as the MBS market tries to find a level of balance so that lenders like us can provide a stable rate.


#interestrates #mortgage #financing

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©2020 by Dylan Kennelly