Mortgage rates could hit 5% today

From Mortgage News Daily:

Mortgage Rates at New 2-Yr Highs Ahead of Important Jobs Report

Mortgage rates leaped to new 2-Yr highs today, after strong economic data increased the chances that tomorrow’s all-important jobs report would be similarly strong. The rate with the most efficient combination of upfront cost and monthly payment for ideal scenarios (best-execution) moved up to 4.875% for Conventional 30yr Fixed loans on average–roughly an entire eighth of a point in a single day. While some some lenders remain at 4.75%, others are closer to 5.0%–a rate that will be more prevalent if tomorrow’s data is strong.

In thinking about how much rates have moved so far this week, it’s important to note that the most widely used metric for changes in rates–Freddie Mac’s Primary Mortgage Market Survey–relies on data collected from Monday through Wednesday of any given week. Lenders who participate in the survey are emailed Monday and asked to respond by Wednesday. This can result in a delayed response in Freddie’s data vs reality.

Unfortunately, rates are very capable of going even higher–something we warned about in no unspecific terms yesterday. At this point in the day, there’s little that can be done to lock in a rate before tomorrow’s excessively important jobs data arrives. In that sense, it “is what it is,” but for the sake of mental preparation, rates can still go higher if the data is strong, and the movement can still be big. If we happen to be benefiting from weaker-than-expected data tomorrow, we’ll cross that bridge if we come to it.

This entry was posted in Economics, Housing Recovery, Mortgages, National Real Estate. Bookmark the permalink.

60 Responses to Mortgage rates could hit 5% today

  1. Wait until the UST-10 hits 5%.

    It will happen.

    Much wailing and gnashing of teeth.

    It’s all over.

  2. Condo 1987 says:

    #1..maybe over for you but looking forward to higher rates, no debt, ton of cash here.

  3. JJ says:

    Even if you own bonds outright where you suffer big paper losses. Long term it just means you are reinvesting the interest and bond maturities at higher rates. For older folks the paper loss of principal is less important than the income stream.

    My debt consists of a zero percent GM loan and the condo I bought I inherited the last five years of a 13K assessment loan per unit for a new roof and cement work. Both have rates locked in.
    Even 8 percent mortgages are a good thing sometimes. My first mortgage was 8% and I always pre-paid each month to knock it off as 8% sucks. Meanwhile 0% on the car etc type loans you stay in debt much much longer as you have no urge to pay it off and you tend to take out a bigger loan in the first place. Low rates are part of the reason we are seeing new retirees in their late 50s and 60s with such big debt in retirement. When rates were 8-16% on mortgages folks bang them down and had mortgage burning parties and did not take car loans and paid off credit card loans and avoided student loans. Without easy credit life is tougher in your 20s-40s but later in life you have no debt and you can easily live off your interest.
    Condo 1987 says:
    September 6, 2013 at 8:01 am

    #1..maybe over for you but looking forward to higher rates, no debt, ton of cash here.

  4. Condo 1987 says:

    Guess: 196K

  5. Condo 1987 says:

    #3..I was peeing in my pants in 1993 when I got a “low” 7% mortgage!!!!

  6. Condo 1987 says:

    ooohhh..had it reversed..169k

  7. anon (the good one) says:

    JJ read The Buy Side by Turney it’s a real account of a real wall st guy, use some of his real stories to recycle them here as your own

  8. anon (the good one) says:

    @beckyquickcnbc: 10-year Treasury yield falls to 2.872% after jobs report comes in just below expectations. (Was 2.959% before jobs#.)

  9. grim says:

    No 5% today

  10. Anon E. Moose says:

    Condo [2];

    You’re not worried about inflation sitting on a pile of cash? The inflationary march was a big motivator for me to finally pull the trigger on a house.

  11. Condo 1987 says:

    #10…own home, have inflation related products and expect to follow rates up. I already got nailed by biggest inflation in my life, housing and college tuition….as far as medical..I look at things globally…

  12. Happy Renter says:

    (10) There will be inflation, but as far as money set aside for a house, the lower prices from higher interest rates (and a continued crap economy) will make it a wash for the cost of a house, imo. Meanwhile, I’ll take the flexibility of my stash, especially since I’m still on the fence about leaving the People’s Republic of New Jersey.

  13. Condo 1987 says:

    #12..I am prepared for inflation, but how will it happen? Real incomes are down, if you look at that study I posted yesterday, that trend may continue for 30 more years….limited wage growth, pensions being cut, other entitlements slowing if not under pressure….who is chasing goods with extra dollars?? Are there big wage increases coming for the average American? Will the fast food workers all get $40,000 salaries, a la UAW? Not sure I see people swimming in money…yes, maybe top 10%, but the other 90%?

  14. finallybuying says:

    I am buying a house and closing on Monday. Closing was scheduled at 3:30 but now I am being told the lender requires the everything to be signed by 3. so it has to be changed to 2 or 2:30. Not a huge deal but is that normal? They also made me change my title company because the original one was affiliated with my agent. To late to change anything now but this is my first home purchase and I was wondering if this is at all typical? Thanks!

  15. Dan in debt says:

    14 – Neither one to me sounds really surprising being that you’re talking about a Friday.

  16. Fast Eddie says:

    There’s no housing inventory; jobs numbers are revised sharply down and those that are counted mainly consist of 15 hour per week stock person jobs at Target; salaries are flat for over a decade and 30 yr. rates are at 5%. Yet, houses are selling in our neck of the words quickly and commanding higher prices? Just for ha ha’s, let’s say I buy this line of sh1t hook, line and sinker. Explain to me how this is possible given that every trend points in the other direction. I won’t hold my breath.

  17. grim says:

    House next door to my sister is closing soon. The new owners paid something like 60k more than my sister did for her place. Very similar layout and size, and requiring the same amount of work. Little over a year difference, and they paid a good 12% more. Place was was in ARIP and UC in about 3 weeks total time, so I’m pretty confident in my closing price estimate.

    She did get a great deal, despite it being a very painful short sale.

    House next door to me is UC as well, dying to know what it closes for. They are taking a real bath, and the new buyers are getting a really great deal (On the order of $125K+ below peak). I’m sure it’ll close in the low sixes.

  18. Condo 1987 says:

    #16…as an ex-NYer…I’d suggest that every “middle class” homeowner in SI, Brooklyn and most of Queens can experience a better quality of life in many north jersey towns, plus their houses are generally worth more than they are here….so it is a win win..better house, better neighborhood…..

  19. grim says:

    19 – Clifton, eh? Yeah, hope he’s got deep pockets, there are a lot of folks that are going to need to be paid off, even more campaign donations and boosters, donations to the cops & fire, etc.

  20. Fast Eddie says:

    plus their houses are generally worth more than they are here….so it is a win win..better house, better neighborhood….

    A better house and better neighborhood here? Who the f.uck is paying more for the sh1thole that they’re leaving behind?

  21. freedy says:

    The mayor over their in Clifton never misses a chance for a free meal , a drink , and of course a little donation to help the cause .

  22. Condo 1987 says: me..but they are..immigrants, multiple generation families…Hasidic/orthodox Jews…look at rents/prices in those “hot” spots in Brooklyn? When I was in college those were “bad” areas……I think NYC/Bkly has a magnetic attraction for folks over the whole country…they graduate college ..move here…and some make it and buy houses….I assumed that would all end with 9/11…but now there are more residential housing by the battery than ever before!!!!

  23. Anon E. Moose says:

    freedy [19];

    Smoking Cigars and Gambling in Clifton . Here we go

    Is that a call for another GTG? [I joke, I joke…]

  24. grim says:

    Brooklyn is closed, sold out, no room in the inn.

  25. grim says:

    24 – Should have brought it up earlier – We could have done a Clifton breakfast GTG at the Hitching Post – Leggs and Eggs they call it.

  26. Condo 1987 says:

    From WSJ Letters to Editor regarding College Costs:

    Prof. Vedder is approaching the problem from the wrong direction. College is unaffordable because too many college degrees have little or no value. Even the elite degrees have depreciated. I graduated from an Ivy League university in 1975. My tuition was $3,300 per year. Starting on Wall Street at $15,000, I earned five times a year’s tuition in my first year. My son graduated from the same school, went to the same job. But he paid $50,000 tuition and earned $75,000. In relative terms, he paid almost three-and-one-half times as much as I did. Note that my tax rate was lower (bracket creep) and my student-loan interest was tax deductible. Inflation drives starting salaries. If today’s college graduate earned five times last year’s tuition, no one would complain that college is unaffordable……

  27. anon (the good one) says:

    ” College is unaffordable because too many college degrees have little or no value.”
    don’t know what that means. maybe that’s why NJ is unnafordable, too many houses have little or no value.

    by the way, Inflation is dead. you should fear deflation, that’s the real threat

  28. Painhrtz - Disobey! says:

    Grim that place was among my first forays into the seedy outer edges of strip joints. Lets just say the russian dancer was more than willing to offer anything else for a few dollars more. Place was truly f*cked and that was 18 years ago.

  29. grim says:

    Let’s see who I can send into a tizzy… From the Star Ledger:

    The 14-year-old boy shot and killed in a Terrell Homes at Riverview Court courtyard Wednesday night …

    This morning, the victim’s mother, Jennie Henderson, came out and stood in front of the memorial for few minutes eating ice cream and reading the messages written to her son. She was soon surrounded by a group of teen-aged boys, some of whom sobbed.

    “I just want them to find who killed them,” she said this morning. “He was just a baby.”

    Neighbors said the victim had planned to start the new school year at East Side High School today.

    “A 14-year-old child being killed — that says it all,” said a woman who asked not be named.


    wait for it


    Following the shooting, detectives from the prosecutor’s homicide task force searched the boy’s room and found 30 bricks of heroin, a loaded 9mm Smith & Wesson handgun and a box of .357 ammunition, the document said.

    His last contact with police was on Aug. 15, when he was arrested for possession of crack cocaine, according to the document, and he was also arrested on West Kinney Street in April for assaulting another high school student.

    “He was just a baby.”

    I think I found the problem.

  30. Libtard in the City says:

    30 bricks of H.

    Bebo must be jealous.

  31. No, grim, the problem is that the NJ courts haven’t mandated another 10K per student in spending at the Abbott prison where that kid probably only showed up for class 40 days a year.

    Why get an education when you can sling dope, pack at the age of 14 and be Tony Montana by the time you “graduate” HS? In the eyes of a dumbass ghetto kid with a shit-for-brains mom, getting shot or killed is actually a low-risk deterrent to becoming a big-time thug.

    We are well and truly fuct.

  32. Bebo don’t get shot.

    Bebo does the shooting.

  33. Ring fence Newark with razor wire and let ’em all whack each other.

  34. Or, conscript every young male in Newark, Trenton, Paterson and Camden, send them to Syria, and get this thing done right.

  35. Apocalypse is truly nigh.

    “After months of rock-hard gains in stocks, and an extended period of firming in the headline jobs data, some are noting that today’s limpness in the jobs data is temporary, driven by an unexpected choke down of staffing in the p0rn industry. As Bloomberg reports, a big surprise in today’s report was a 6% decline in the number of people working in the “motion picture and sound recording industries.” It turns out that, as WaPo notes, the U.S. p0rn industry stopped working for a week after an actress tested positive for HIV. It seems we should all be pulling for a revival of the p0rn industry to raise the economy from its slumber.”

  36. Libtard in the City says:

    Bebo sets the interest rate.

  37. grim says:

    We are all bebo now.

  38. Fast Eddie says:

    Obama is Bebo.

  39. Dan in debt says:


    Citi advertises 5% mortgage in their banks today so you’re spot on actually.

  40. JJ says:

    Grim, WTF. Getting a good deal means paying below current market value. Picking a point in time over last 100 years when RE was at its all time high and then saying they got 125K off is crazy. Heck I guess Cisco Stock is a screaming buy as Compared to its 2000 internet bubble high it is a huge bargain.

    You take the current comps and if you find a mis-marked sale, death, divorce, short sale, relocation, fixer upper etc. And you get it for 125K off similar houses on that block that recently sold that is a bargain. Getting it 125K off Spring 2006 all time highs does not mean anything. It is a realtor trick akin to Kohls where everything is 50% off an inflated price that no one actually pays.

    grim says:
    September 6, 2013 at 10:48 am

    House next door to me is UC as well, dying to know what it closes for. They are taking a real bath, and the new buyers are getting a really great deal (On the order of $125K+ below peak). I’m sure it’ll close in the low sixes.

  41. Juice Box says:

    Been really busy at work, no time to post.

    Anyway we just lost another long time employee to North Carolina. Little did I know there is a place there called :”CARY”

    “Concentrated Area of Relocated Yankees.”

  42. Juice Box says:

    Mortgage rates are now 5%, but the savings rate is still .90%.

    It is good time to be a gangster.

  43. anon (the good one) says:

    entrepreneurship. most grown ups here can’t afford to buy a house and at 14 he was already moving 30 bricks. with those skillz, and had he been Caucasian, lots of riches would had been waiting for him on Wall st.

  44. grim says:

    Damn it feels good to be a gangsta
    A real gangsta-ass nigga plays his cards right
    A real gangsta-ass nigga never runs his f*ckin mouth
    Cuz real gangsta-ass niggas don’t start fights

    And niggas always gotta high cap
    Showin’ all his boys how he shot em
    But real gangsta-ass niggas don’t flex much
    Cuz real gangsta-ass niggas know they got em

    And everythings cool in the mind of a gangsta
    Cuz gangsta-ass niggas think deep
    Up three-sixty-five a year 24/7
    Cuz real gangsta ass niggas don’t sleep

  45. Condo 1987 says:

    #42..I was told by the locals it was Containment Area for Relocating Yankees (my son goes to NC State)

  46. Bystander says:


    I don’t remember the fed creating 15 different programs and trillions in Cisco bailout money to stop Cisco shares from dropping below 60 from high of 80. Perhaps that is the difference.

  47. JJ says:

    The average IQ in NJ and NC just went up.

    Juice Box says:
    September 6, 2013 at 3:14 pm

    Been really busy at work, no time to post.

    Anyway we just lost another long time employee to North Carolina. Little did I know there is a place there called :”CARY”

    “Concentrated Area of Relocated Yankees.”

  48. JJ says:

    That to me is a bit of a bone of contention. Folks who bought internet stocks got slaughtered in a free fall CAUSE by the Feds when they jacked rates sky high in 1999 and early 2000 go slaughtered, but folks who bought RE got bailed out.

    No complaints I got a bit bailed out after Sandy, but what about someone who was very long bonds or mortgage backed securities who got crushed last few weeks. What about someone without fire insurance whose house burned down. ”The govt likes to pick winners and losers.

    For instance AIG bondholders and employees won big and stock holders got crushed, meanwhile at GM both bondholders and stockholders got crushed. Countrywide and Bear employees and bond holders got bailed out but Lehman stock, bond and employees got killed. The randomness of govt intervention is amusing.

    Bystander says:
    September 6, 2013 at 3:52 pm


    I don’t remember the fed creating 15 different programs and trillions in Cisco bailout money to stop Cisco shares from dropping below 60 from high of 80. Perhaps that is the difference.

  49. Essex says:

    Some businesses are still booming….

    A West Orange man scammed more than $275 million in a three-year scheme defrauding hedge funds along with three other men, the U.S. District Attorney’s Office in Maryland announced Thursday.

    Federal authorities alleged Jonathan E. Rosenberg, 44, of West Orange, along with two other New Jersey men and a Florida man acquired billions in medical debt that hospitals were unable to collect and cooked the numbers to appear attractive for investors.

  50. grim says:

    Anyone who thought bad medical debt was a better investment than subprime trash deserves to lose their money.

  51. anon (the good one) says:

    what Glen Rock? this surely must be a mistake.

    @njdotcom: Glen Rock teen faces charges after selling heroin to undercover narcotics detectives, police say

  52. Juice Box says:

    re # 52 – Opioid misuse either in the form of prescription drugs or street drugs like heroin, knows no race, ethnicity, or socioeconomic position. I think everyone here knows this.

    The Billion Dollars Obama wants to spend bombing Syria instead should be used to wipe out the Sinaloa Cartel. I am pretty sure sending a few hundred Tomahawk missiles and a few thousand sorties in their direction will stop their chemical weapons too.

    Then go after the Docs writing all those scripts. A few hangings perhaps?

  53. joyce says:

    Pff, random. Nominated for dumbest jj / blog comment ever.

    JJ says:
    September 6, 2013 at 4:15 pm

    The randomness of govt intervention is amusing.

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  55. Juice Box says:

    re# 54 – Thanks Grim for releasing my post. A follow up, about 22k Mericans die each year over prescription and street dug abuse. If that isn’t a National Security issue then I don’t know what is.

  56. qctwwimqt says:


  57. Juice Box says:

    #55 – Joyce I was a part of a Lobbying group in DC once. Stupidest thing I ever did, and I have done plenty stupid in all of my years.

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