Sacramento Mortgage Rates: Where Are Rates Headed?

This certainly is a confusing time for borrowers. The Fed keeps cutting short-term rates, the falling Prime rate has brought down rates on home equity lines, and desperate lenders continue to advertise loans that don’t exist. Add several price changes each day and a dash of well-earned industry distrust, and it’s no wonder consumers are skeptical. It just seems like 30 yr mortgage rates ought to be lower than they are.

There are some simple reasons for this, none of which you’ll find in within easy access. But if you dig a little, the simple truth emerges. The debt markets are in a state of panic. Investors who created liquidity by buying mortgage backed securities–the Norway Sovereign Wealth Fund, the Peoples Bank of China, and PERS, among others–believed the Wall Street alchemists and their talking-dummy rating agencies who claimed that the toxic waste was potable. Now, after vomiting up $200 billion in losses and “write-downs” (keep in mind that the CDO market is about $2 trillion in size), they’re not exactly storming the punchbowl. So, the banks have to juice the rates to lure investors back. So far, it’s not working all that well.

So while the rate confusion reins, if you want to know where conforming mortgage rates are, Freddie Mac offers their Primary Mortgage Market Survey. It’s published every Thursday and shows average regional and national rates for popular loans. Depending on your qualifications–credit score, employment history, debt ratios, and reserves–your mileage may vary.

If what you’re hearing on the radio, reading in the newspaper, or being told by your neighbor about rates varies significantly from Freddie Mac’s figures, poor out the kool-aid, place your hand over your wallet, and walk calmly toward the nearest exit.

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