Steamboat Real Estate Home Search and Blog

This post is guest authored by Ed Allbright, a certified mortgage planner and owner of Columbine Mortgage here in Steamboat Springs:

WHAT happened to RATES this week? Buyers need to get off the fence!

Glad you asked. In a short sentence too much debt chasing too few investors with real cash. Rates on 30 year fixed jumped .5% from 4.625% to 5.125% within 4 days.

A trillion here a trillion there and soon the bond market is wondering where to put all this debt. The answer is we are running out of places to put it. I thought this might take place in Oct or Nov (as we got closer to the end of the Fed buying mortgage back securities) but as you can see the amount of debt is staggering. Although the Fed is buying higher priced mortgage back securities trying to keep a lid on rates they cannot but enough to do that. Remember that once they buy the mortgage back securities they have to sell Treasury notes to generate money. So if you are an investor you can choose where to place your cash Fed mortgage back securities or Treasury notes…either way the rate is going up because there is too much supply and not enough demand (Real Cash).

So here is the bottom line…if you have a buyer sitting on the fence, they need to move NOW. It will take 45 days to 60 days to get a loan in place. Rates will continue to move up and up.

Ed Allbright
Certified Mortgage Planner, CMPS, CMA
COLUMBINE MORTGAGE
1205 Hilltop Pkwy, Ste 108, Steamboat Springs, CO
Office: 970-871-9802
Cell: 970-846-3740