What's Up with Rates?

By Dave Fratello | March 20th, 2008
It appears that mortgage rates are settling down, but there's a notable break between traditional 30-yr. fixed loans and jumbos, which are most common in MB.

One month ago, in "Rates Spiking Again?," we took note of a recent uptick in 30-yr. fixed loan rates, and noted the fears of one local realtor that the rate increases could continue.

Today's headlines include "Mortgage Rates Fall, 1st Time Since February" (via CNN Money). However, as the first graph here shows (via Bankrate.com) – on a short, 3-month time scale – jumbos are remaining stuck in the lofty territory of late February. (Note: We created these graphs using Bankrate's free tool.)

The second graph shows two jumbo products. The green line is the same 30-yr. fixed as in the first graph, while the blue line is a 5/1 ARM with interest-only payments. The ARM rates seem to have risen significantly from the late-February peak.

Of course, these graphs provide only an illusion of hard data. The data are drawn from lots of sources and there is a lot of variation by region and by lender.

We also have yet to see the effect of higher conforming-loan limits (about $730k) working through the system – redefining what a "jumbo" loan is. Finally, knowing what rates are generally doesn't tell you whether there are willing lenders and whether buyers can meet increasingly rigid criteria.

We're curious what buyers and pros are experiencing right now in the local market.

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