“What’s the interest rate today?” is the typical question; but the real question is: “What are they going to be tomorrow?”
We’ve already seen the first hiccup from the Federal Government’s exit from the mortgage backed securities market. No one wants to hear I told you so when it comes to interest rates so I’m not going to say it.
The Mortgage Bankers Association releases a Weekly Mortgage Applications Survey and according to the April 7th report, Michael Fratantoni (their Vice President of Research and Economics) stated: “Mortgage rates jumped last week as the Federal Reserve completed their purchases of mortgage-backed securities.”
We took a hit of one-quarter percent…however…the rates have not really taken off as anticipated; has someone stepped in to buy up some of the supply? Or is that sound whistling past our ears the other shoe racing to hit the floor? We’re no longer in the high 4’s, but in the low 5’s and we’re mere spectators at this point.
At the end of the day, anyone who says they really know what is going to happen is as cracked as their crystal ball. There are likelihoods and there is reality; we’ve seen it all in this market…all we can be sure of is that we need to hold on tight.