Time Once Again to Discuss "All-Time Low" Mortgage Rates

Posted To: Mortgage Rate Watch

August 4th, 2020 was the best day ever for mortgage rates . That’s when we hit the lowest all-time lows we’ve ever seen, and none of the most prevalent news stories about all-time lows since then have been technically accurate. What’s going on here? So many things… but they’re not too complicated. First off, there is no universal mortgage rate . The closest thing to a purely universal benchmark that will ever exist is the trading price of the bonds that underlie the mortgage market. These bonds (mortgage-backed securities or MBS) determine how much mortgage loans are worth to investors, thus setting the boundaries of mortgage lender profitability. In other words, there’s a certain line in the sand for mortgage rates below which a lender is losing money. The only objective and universal contributor…(read more)

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