Predictably mortgage rates moved quickly in anticipation of rising Federal Funds as mortgage lenders must secure forward contracts (reserve money at a certain rate today for delivery at a later date) to complete loan transactions. The 30 yr. fixed is currently hovering between 5% and 5.375% which is a big jump from 3% range we have enjoyed for a couple of years. To put this in prospective the Fed’s (up until recently) have been continuously supplementing mortgage rates since the great recession. It’s like holding a basketball under water, sure you can do it for a while but eventually it pops up. Based upon a 3% federal funds rate and a 2% margin mortgage rates have likely reached their near-term peak, from hear we watch inflation and the 10 Yr. Treasury.
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