What happened to mortgage rates? Did they really go up .5%
You may have heard or start to hear, that mortgage rates have gone up. In fact on new loans I am doing, I have seen anywhere from a .5-.75% increase in rates since May 21st.
So what is the reason for all of this you ask? Even though the fed is buying mortgage backed securities, they are being offset by the supply of mortgage backed securities hitting the market. The reason for this new supply is the result of all the mortgages that have closed as a result of the lower rates. Those mortgages have now been securitized and are being sold on the open market as mortgage backed securities. This new supply is offsetting the purchasing power of the fed and just may lead us to higher rates. As you can imagine there are still loads of mortgages that will be securitized and sold as mortgage backed securities. This could offset anything the fed can do in purchasing more mortgage backed securities.
My advice, if you were waiting for lower rates to refinance, you may miss the boat as the anchor seems to have been pulled.