Archives for February 2014

Rates went down after the Fed Taper?

To the surprise of many mortgage rates are lower now then when the Fed started tapering……but how can that be?  Well it’s a difficult question at best and there is no simple answer as to why.  Some believe this recent move down is just a pause, has nothing to do with the taper and rates over the next few months will move much higher.  Others believe that as the Fed exits the bond market we are seeing a more “normal” market and that could be a continuation of these low rates.  Also an important factor in the recent drop in bond yield is due to the problems in several “Emerging Markets” and some not so good data on the domestic front.  So the move down is not all Taper related.

Nationwide Mortgage Applications February 2014

Despite a move down in rates recently, mortgage applications continue to fall.  It appears that the current volume is near a 20-25 year low as both purchase and refinance applications dry up.  Lenders driven primarily by high volume are finding it very difficult t operate in this environment.   From a historical stand point rates are still very low however compared to the last 2-4 years they’re on the high end.  It’s difficult at best to say where rates will be in 6-12-24 months so it’s important to remember to lock in terms to avoid any possible rate increases.