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Sacramento Mortgage Rates: Another Wild Week
So mortgage rates fell a bit this week. Freddie Mac says the average 30 yr fixed was around 5.875% with 1/2 point and the 5/1 ARM around 5.5% with 1 point. The new conforming jumbo rates–between $417k and $580k in the Sacramento MSA–were about 1% higher, and regular jumbo rates about 1% higher than that. Jumbo rates have gotten even uglier in the recent crisis of confidence surrounded the Bear Stearns collapse and the stampede for the exits of MBS investors.
What’s Next for Mortgage Rates?
Well, we’ll get a look at the inflation factor this next week. Expect the bond market to be hypersensitive to any signs that the recent Fed easing is igniting inflation again. Bernanke is clearly in a pickle now, having had to bail out the investment banks to prevent a bank run that would have rivaled the 1930’s. If inflation fears catch fire, the Fed will have a tough choice to make. This may be bottom for mortgage rates, and by summer the Fed may have to begin the painful process of tightening. It sucks being Ben right now.
Buying Activity Picks Up
It might be premature to call it a trend just yet, but I’ve seen an increasing level of purchase activity the past two weeks across all price ranges. Investors and home owners alike seem to feel like the bottom is near and don’t want to wait for the competition to drive up prices. If I’m right and rates are as low as they’re going to get, this is the time.
Anyway, I hope you have a Happy Easter!
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