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发帖数: 347 | 1 Amy Hoak is a MarketWatch reporter based in Chicago.
As world events dominated the news in recent weeks, mortgage rates enjoyed a
reprieve from a climb that began late last year, keeping the 30-year fixed-
rate mortgage down below 5% at the start of what is traditionally the home
buying and selling season.
While multiple factors move mortgage rates and it's impossible to pinpoint
the exact reason why they're up or down, we do know this: The tsunami and
subsequent nuclear disaster in Japan likely caused a flight to quality by
worried investors, moving more money from riskier investments into safer U.S
. Treasury bonds and mortgage-backed securities, said Robert Rauf, a
mortgage banker with Real Estate Mortgage Network in Manasquan, N.J. Ditto
for conflicts in the Middle East, including the current situation in Libya.
That flight to quality by investors, in turn, caused mortgage rates to drop.
The average rate on 30-year fixed-rate mortgages was 5.05% for the week
ending Feb 10, according to Freddie Mac's weekly survey of conforming
mortgage rates. The Libyan revolt began in mid-February, on the heels of the
uprising in Egypt. The tsunami in Japan occurred March 11.
And by the week ending March 17, rates on the mortgage had fallen to an
average 4.76%, Freddie Mac reported.
Rates are up a bit since, averaging 4.81% for the week ending March 24; that
rise may be due to inflationary pressures, Freddie Mac's chief economist
Frank Nothaft said on Thursday.
Or, the leveling off could also signal something else: Investors are getting
past the "initial shock/panic/concern which accompanies such events," Keith
Gumbinger, vice president of HSH Associates, a publisher of consumer loan
information, wrote in an email.
"Fear of thousands dead has turned into reality; fear of a nuclear disaster
has turned into a reality, fear that civil unrest in any number of countries
would turn deadly has become a reality. We're passing the fear and adapting
to the reality," he wrote, "and after a period of assessment, this often
tends to level off interest rates and see them return to pre-event path (if
perhaps with lesser velocity, in some cases)."
That said, mortgage rates still seem to be suppressed somewhat by the
effects of recent world events. And if conditions continue to worsen in
Japan or the situation deteriorates further in Libya, rates could face more
downward pressure, said Dan Green, loan officer with Waterstone Mortgage, in
Cincinnati.
But this effect typically doesn't stick around too long.
For mortgage rates, investors' flight to quality is a good thing —
temporarily, Rauf said. Eventually, fear wears off, and people want back the
money they socked away in safe havens to invest elsewhere.
In the future, some think the costs of cleanup of the Japan disaster could
end up boosting mortgage rates more, Rauf said. Japan is a major holder of U
.S. securities, and the country — as well as insurance companies settling
claims — will likely need to sell off a chunk of U.S. investments to pay
for the crisis, he said. "The extra supply [of U.S. securities] will end up
driving the price down and the yield up," Rauf said. That could cause
mortgage rates to rise.
But Bob Walters, chief economist for Quicken Loans, said while Japanese
expenses will be large, unwinding of positions won't happen at once and
shouldn't impact mortgages severely.
And of course, while rates have been influenced heavily by international
news lately, domestic issues could cause rates to rise, too. For example,
the Treasury Department recently said it would begin selling back mortgage-
backed securities that it bought to support the mortgage markets, and that
could also boost rates higher, Rauf said.
In the long run, what happens with rates depends on when the economies of
the world start improving appreciably and "how the central banks of the
world will unwind all the stimulus, the medicine it has pumped into the
patient," Walters said.
In Walters's opinion, rates won't move too much — remaining in the ballpark
of 4.5% and 5.5% — throughout the year. That basically mirrors the most
recent Freddie Mac forecast, which has rates on the 30-year fixed-rate
mortgage slowly rising to 5.5% in the fourth quarter of this year.
Even at 5.5%, rates are low, historically speaking. But at under 5%, they're
near record lows. "Realistically, rates right now are flirting around the
40-year low mark," Rauf said. "The problem is, everyone is spoiled."
The recent dip in rates helps those in the market for a mortgage to lock in
lower rates, but they should move soon, Green said. "I've been recommending
to clients: The current market is a gift — they should be locking right now
," he said. |
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