March 11th, 2011 12:09 PM by BILL WILBANKS
Ever notice how lenders bump rates up on the wisp of a rumor but getting them to lower them sometimes feels like a sledge hammer is needed? Well lately it's been the fact that lender treasury (pricing) departments have been reticent to book anything based on coupon rates below 4.50%. That has generally meant that most loans were being thrown in to that pool at a 4.875% to 5.25% booked level. Though the 10yr Treasury has been up to the high 3.4's (+) of late it closed last night at 3.3602% after the stock market dropped over 200 points in trading. In the middle of the night it went as low as 3.33% which was the lowest since late January. This morning with retail sales data that was inline with expectations and the terrible news out of Japan it jumped to 3.38% and now sits at 3.40 at 11:35 this AM. The 3.30% level has been providing basement support of late and we just haven't seemed to be able to break through to a 3.0% level where we would certainly expect to see some lowering of long term mortgage rates. Other reports today showed somewhat worsened consumer sentiment (gas prices?/budget issues) and consumer expectations for continued increases in the inflation level. There's a surprise, huh? Add to the mix the Fed's proposed stopping of purchasing treasuries in June and it's possible impact on interest rates when the main market supporter leaves the field, don't you think it's soon time you consider getting off the fence.