Austin loan officer John Schutze shares his weekend mortgage rate update:
œMortgage rates finally leveled off….for now!
30 year fixed rates reached their peak at 5.5% late Wed but improved to 5.375% Thursday and Friday.
Of course, there are many factors that caused rates to rise but one factor is simply related to supply and demand. The huge amount of refinance loans that closed over the last few months are now hitting Wall Street as lenders now have to sell those loans to investors as mortgage bonds.
However there aren’t necessarily more investors looking to purchase the extra supply of mortgage bonds. Therefore lenders must raise the rate of return on the mortgage bonds to entice investors to purchase them. This in turn means higher rates to the consumer.