Mortgage rates

They're going up.
Borrow now or be priced out forever!!

Shouldn't they be coming down? Can someone explain?

Higher risk of inflation due to QE2.

Treasury 30-Year Bonds Fall on Concern Fed Stimulus Will Stoke Inflation
By Susanne Walker - Nov 15, 2010 3:42 PM

Treasury 30-year bond yields rose to the highest level since May as a report showed retail sales increased and a group urged the Federal Reserve to halt purchases of bonds because it may risk a surge in inflation.

The extra yield, or spread, that investors demand to hold 10-year notes instead of those maturing in two years rose 12 basis points to 2.4 percentage points. Ten-year note yields touched the highest since Aug. 6 as a group including former Republican government officials and economists urged the Fed to rethink quantitative easing. Retail sales rose 1.2 percent in October, stronger than forecast.

“The 30-year is the area most susceptible to inflation,” said Kevin Flanagan, a Purchase, New York-based fixed-income strategist for Morgan Stanley Smith Barney. “If the Fed is committed and the numbers are better-than-expected, does it mean the Fed may be overinflating the economy down the road? It underscores the sensitivity of the market and how far we’ve come.”

The yield on the 30-year bond rose eight basis points, or 0.08 percent, to 4.37 percent at 3:02 p.m. in New York, according to BGCantor Market Data. The 4.25 percent security due in November 2040 declined 1 9/32, or $12.81 per $1,000 face amount, to 98 1/32.

I guess your gamble didn't pay off

Rates are going up because of action in Japan. The Yen took a hit. The market views this as risk premiums going up. Also the Fed can engage in as much quantitative easing as they like but if the market doesn't want to pay up for Mortgage TBA'S (I.E. THEY DON'T DON'T LIKE THE RISK ADJUSTED RETURNS). They don't buy and that that translates into higher mortgage rates for the consumer. Mortgage Rates are heavily influenced by the yields in the TBA market.

River...what are you talking about "Rates are going up because of action in Japan" What action did Japan take?

The dollar rose to a six-week high against the euro and climbed versus the yen as concern that some European countries will struggle to repay debt and rising Treasury yields boosted demand for the U.S. currency.

The greenback touched the strongest in five weeks versus the yen as U.S. 10-year note yields reached a three-month high. The euro fell versus the dollar on speculation Ireland may need a bailout, six months after European officials crafted a $1 trillion rescue plan in response to Greece’s debt struggle. A group of economists called on the Federal Reserve to scrap buys of $600 billion in U.S. bonds under quantitative easing.

“Yields are supportive of dollar-yen,” said Brian Dolan, chief strategist at FOREX.com, a unit of online currency trading firm Gain Capital in Bedminster, New Jersey. “At this stage 83.20 is where Japanese exporters have their buy orders placed, but the move up in U.S. yields suggests more upside to dollar against the yen.”

Watch the yen. It's a very good way to measure risk. In particular the yen/ausie dollar exchange rate has matched the s&p price moves for some time now.

watch for the Giants to win openers.... it's a good sign they'll lose the superbowl.

fix your nutz squirrels.. the winter is coming.

I didn't gamble at all. If rates fell i would do a one time float down. Since they didn't i will stay with my lock at 4.25. I didn't use teh YenAussie dollar exchange rate at any point in my process.

gator , you are long convexity. this was priced in.

River, not sure what you are talking about but i am sure you are right.

To; OP ...maybe something of a minor scramble to *LOCK IN NOW* as folks, like you, see rates start to inch back up?

Gator, mortgage rates are linked to Treasuries. The actual act of QE2 does not move the rates as the entire market already expected it more or less, so yields prior to it reflected it for the most part. If there was going to be an obvious move after the implementation, everybody and their mother would have piled into it until the yield dropped. Remember that efficient markets lead to efficient prices, meaning that you for the most part can't predict the future. Note this is not the same thing as a rational market, where prices make "sense" according to whatever criteria.

There must be a lot of people trying to close on their locked in rate. They bank is dragging their feet and now I need to ask for an extension. Seems like a lame game they are playing so I don't get the locked in rate.

locked in 4.375 for a refinance with citibank, just closed today.

probably could have got about .2 cheaper if i was about 2 weeks earlier.

4.375 is a great rate.

Locked in 4.25 and had to extend the window for the lock since they are taking too long to get their ducks in line.

Wow! Rates keep going up each day

Finally closed at 4.25% whew!

Gator, congratulations! That's a really amazing rate.

The Feds are buying 2 and 5 year notes, not long term like 10 year and especially 30 yr, hence the move up in the yield. Also inflation fears caused the 10 yr note to sell off. But with todays CPI report, inflation is non existent and the yield on the 10 yr went down translating into rates not going higher, in fact a little lower.
www.esfunding.instantlender.com

What in the world are you talking about streetnotsosmart...The 10-year note yield rose two basis points to 2.86 percent at 2:57 p.m. in New York, according to BGCantor Market data.