As of today, mortgage rates are nearing 4% again for 30-year fixed rates.
That is, rates are at their highest in months.
This reflects a strong stock market and a climbing 10-year Treasury pricing.
A mortgage broker at Citibank, Michael Most, gives me a good read on his current borrowers.
He tells me that he is getting all of this clients to “lock rates as they are today.”
He sees rates continuing to increase, that “these are the last days of the good deals…by Q3 and Q4 we will see rates hit 4.0%.”
Should rates tick back down, his bank and most others do offer purchasers the opportunity to float their rates down at least once before closing.
Wells Fargo recently was allowing the floating down of locked-in rates if and when they drop by 1/8 of a point or more, as many times as that might happen.
Of course, as rates tick up, owners are likely to try and refinance before they go any higher.
Low interest rates and a more optimistic and open lending environment has fueled borrowing in the corporate sector, along with residential purchases and refinances.
Will rates continue to climb?
Will it impact purchasing?
Will the Fed do anything to slow rates from climbing?
Other mortgage brokers I have spoken to are very optimistic that rates, while no longer at historic lows, are, when seen in a broader context, are the sign of a recovery trend.
Certainly, we are seeing recovery in full swing in New York City.
I don’t know that I’m confident that recovery will hit with the same velocity anywhere else, and discussion of a “jobless recovery” is a symptom of the same trends that have made New York City’s tech sector so strong right now- improved efficiencies across all businesses, requiring fewer workers to do the same amount or more than before.
Since I focus on New York City, and know my readers and clients are also most concerned about what is happening here, I can say that a strong stock market, along with a tempered rise in rates, will allow the market here to recover and improve.
I suspect that over the next few weeks, we’ll see some event that will help rates tick down- and all buyers and those refinancing, should be ready to lock in rates when that happens.
18 months ago, many buyers were THRILLED to be getting mortgage rates in the low 4’s.
So we are still in a VERY low rate environment, whatever happens.