Rate Update September 10, 2008
Mortgage rates are essentially unchanged from yesterday although pricing on 30 year fixed loans are modestly worse.
We still believe that over the next few weeks mortgage rates will improve. Now that the federal government has assumed the guarantees of Fannie Mae & Freddie Mac’s mortgage-backed bonds investors will view these securities on par with US treasuries.
30-year treasury bonds are currently yielding 4.19% while 30-year mortgage backed bonds yield between 4.85%-5.15%. We would expect the spread between these yields to converge over the next few weeks. Although, it’s not likely that rates will move in a straight line so we still need to be careful on timing.
Watch today’s you tube video for information on two new blog postings featuring important information that real estate professionals should be aware of.
Post #1- What the bailout means for you
Post #2- Mortgage guidelines continue to be tightened