Let me throw a big important question out, see what you and others think? What do you think the sudden drop in the purchase index (and refi) is about? Here's the avg. interest rate in the last three weeks of Nov: 30 years 5.68%, ARMS 4.02%. The purchase index (all seasonally adjusted) was 475, and refi index was 2234. For the first two weeks in Jan it was 5.69% on the 30, and 4.17% on the ARMs. Next Wed's rate ought to be a bit higher on the ARM. So a slight rate increase and yet the purchase index fell to an avg of 405, and the refi to 1711.
Is it because of bad weather in Calf, or is that a dog ate the homework excuse? Of course if housing prices keep going up, then the real cost even with no significant rate increase, prices out more marginal buyers. So we may be at the point where every little bp increase has a large marginal effect, unless housing prices weaken? And if housing prices weaken, will that remove more marginal buyers like the "investor group" that's 10% of the market.
Message 20952808
I find it revealing that foreign CBs had to buy $3 billion/week over the last three weeks to maintain the extremely low agency spreads required to keep these rates from really ratcheting up.
gcm.com
Secondly, the spreads the financial institutions are getting are really contracting, it's getting to be lousy business for them unless prices (rates, fees)are increased. This is Nov. Dec and Jan has to be even worse:
idorfman.com
There are too many players, so I sense we could be at a real tipping point. |
