Mortgage Blog

How Can we tell the rates are the bottomed?

If you guys read my blogs before, you can tell
that I called the bottom of the ARM rates and asked
everyone locked the rates. And we should not see
those low ARM rates for quite some time.

And now I would say that 15 yr fixed will hit the
bottom soon. Mortgage industry like any other
industry. They should make money, even though
the margin is low with low rates. But they can
not get a rate and they do it for free or losing
money. Those kind of rates are the lowest rates.

Each loan programs are "correlated", like 30 yr fixed
rate is 0.375% to 0.625% higher than 15 yr fixed, etc.
When the spread is too higher, then the other programs
will go higher or lower depends on the difference.
That's why I predicted 30 Yr fixed will go lower
when the spreads are too wide.

And for the current market, the one thing is for sure,
15 yr fixed will hit the bottom, 30 yr fixed may go
a little bit lower.