Refi Booms, Loan Limits, and Mortgage Rate Misdirection
'Tis the season for things to be something other than what they appear to be, apparently. Lenders are talking about new loan limits, but they haven't officially changed. News stories are saying rates went lower this week, but they're higher. And there's even talk of a big refi boom, but as you may have guessed, that's also not exactly right. Rates . Rates continued to move slightly higher (yes, higher), while remaining close enough to long-term lows. This chart of 10yr Treasury yields (a proxy for longer-term rates like mortgages) does a good job of capturing all of the positive momentum seen in recent months as well as the mild correction that began after last week's Fed rate cut. Things look even milder if we focus on mortgage rates. In fact, one measure of mortgage rates (Freddie Mac's weekly survey) is so mild that it actually went LOWER this week. Sadly, Freddie's numbers don't align with reality this week. We are normally able to use the objective daily numbers from MND to reconcile such discrepancies, but it's not possible in this case. If you want a deeper dive on this phenomenon, here you go: Mortgage Rates are 100% NOT Lower This Week. Loan Limits and Home Prices Other misdirection plays are much easier to explain. For instance, you may see some lenders advertising new conforming loan limits that are near, or over $800k. Official conforming loan limits are announced at the very end of November. So who's lying?
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Beverly Amerman
Broker Associate License ID: BK3235075
