Mortgage bonds have seen steep sell-offs for the past four days which will impact the housing recovery and slow down the pace of refinances! We have had multiple rate increases since last week. The sell-off will put added pressure on an overloaded system to close loans before rate locks expire. As I write this update on May 27th (around 11:00 A.M.), mortgage bonds have dropped over 350 basis points since May 20th. The bonds are at the levels we saw in March when the Federal Reserve announced their strategy to purchase mortgage bonds and push rates lower which ignited a mortgage bond rally dropping bond yields. Let’s see if the Fed will try to calm the markets by purchasing more bonds and stopping the bleeding. Eventually, the bond market will find a floor of support and bounce back. Keep in mind, rates are still near historic lows and the conditions for buying a home are still excellent. I am only trying to point out the drastic selling of mortgage bonds within the last week.
Here’s an article from Bloomberg by Jody Sheen:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aw90LMfkBOeU&refer=home
If you are interested in buying or refinancing a home, contact David Wolsky (that’s me!) at 520-977-3300 for all your mortgage needs in Tucson, Arizona. I am licensed throughout the state.
