4% Mortgages Are Back
So, just when mortgage rates started to climb back towards 5% they’ve now retreated down into the low fours. A recent Wall Street Journal article (reposted on Realtor.com) says the four percent mortgage is back after experiencing its biggest drop in over a decade. They report that mortgage rates have been declining along with the yield on the benchmark 10-year Treasury note that was spurred on by the Federal Reserve’s decision to pause interest rate increases.
Interestingly they say that roughly half of current mortgages are originated by nonbank firms, which, unlike banks, don’t have other lines of business or large balance sheets to fall back on during hard times and that might disproportionately depend on refinancing. However, they add that it has created an opening for prospective buyers who may have been left on the sidelines after interest rates jumped.
“It’s such a big move in rates, it’s prompting more potential home buyers to step back into the market,” said Joel Kan, the associate vice president of economic and industry forecasting at MBA.