Mortgage rates are not going down even as bond rates collapse
Uncategorized November 28th, 2007
They conforming loan rates (less than 417K) have come down a little bit over the last few weeks but Jumbo loan rates have not come down.
The short answer is “nobody wants to lend money”. Banks are having a hard time selling their mortgage backed securities to investors and therefore, they must charge higher rates to borrowers. That shows that it doesn’t matter that the Fed is lowering short term rates and that 10 year treasure bonds rates are at the lowest level in 2 years. The reality is that too many investors got burned this year and they are not willing to lend money unless they can get a very good rate for it.
