MORTGAGE WATCH 02/04/22

It’s a beautiful morning in SoCal, but not so much for rates…

Mortgage Rates are moving higher as Fed taper speed increases pushing rates this morning back to 2 year highs along pressure from the new director of FHFA Sandra L. Thompson who just raised borrowing costs (significantly) to ALL home buyers and home owners (See 10yr TSY 6 month chart below)

 

Motivation: this came from foreign central bank announcements–in this case, the British and European counterparts to the Federal Reserve.  Both the Bank of England (BOE) and the European Central Bank (ECB) surprised the market in slightly different ways.  The BOE hiked its policy rate early this morning, despite mixed forecasts.  The ECB did not hike rates, but in comments following the announcement, ECB President Lagarde effectively prepped markets for a rate hike at the next policy meeting.

Translation: big spikes in foreign bond yields led to medium-big spikes in domestic bond yields (aka “rates”).

Bottom Line: We are now breaking though technical resistance with the Fed tapering and soon selling off their balance sheet, meaning rates appear to be heading in one direction, UP! In addition freshly appointed new Director of FHFA Sandra L. Thompson just raised borrowing cost (significantly) for High-Balance loans securitized by Fannie Mae & Freddie Mac.  She also raised the cost of “all” second home loans.  These fees are again very significant and is contributing the rate lift off we are seeing today. *I will be doing a separate piece early next week on this topic. 

 

About the Author

Tim Morissette, also known in the community as Mr. Foothill Ranch, offers over 43 years of real estate experience which has given him an established reputation and unmatched market knowledge. He is joined by his wife, Michele and son Matt, as they continue to offer personal service with an emphasis on achieving his clients’ real estate goals.  This unique combination of traits has led to his proven track record of referral and repeat business. This can be witnessed by the trust of homeowners in Foothill Ranch where he has sold twice as many homes and represented three times more buyers than the next-leading real estate agent for the last 23 years.

As residents of Foothill Ranch since 1994, Tim and Michele are actively involved in the community by fundraising for Foothill Ranch Library, Make-a-Wish Foundation, Cancer Society, Homes for Habitat, Relay for Life, South County Outreach, and the local church and schools. Tim enjoys sponsoring community-wide garage sales, as well as sponsors Paper Shredding and E-Waste Recycling events twice a year.

Tim and Michele are dedicated to their family of four sons, daughter-in-laws, and grandchildren. As a family, they enjoy many outdoor activities which include camping, spearfishing, mountain climbing and exploring the miles of hiking and equestrian trails in Foothill Ranch and the Whiting Ranch Wilderness Park. Tim and his sons are also avid snowboarders and enjoy mountain biking and lobster diving. Family is a top priority in the Morissette household. They look forward to helping more families achieve their dreams of homeownership.