I was SOOO wrong about rates…. BUT it is such good news for home purchases and refinances.

In both my blogging and personal conversations with borrowers, realtors and other business partners, I have been very measured in my comments on where rates could be in the future. Because rates spiked last year just before the holiday season and took eight months to grind down to the same levels again, I was very hesitant to say that I thought rates would stay low as we came to into November. I was SOOOO wrong about that view on rates. Not only have we had record rates as we throughout the Fall, but rates have actually stayed low as Thanksgiving has passed on by.

As you can see from the graph below, rates (as measured by the Weekly Primary Mortgage Market Survey done by Freddie Mac) were very attractive throughout the summer of 2010 but spiked up the week before Thanksgiving. In my opinion, this was largely due to mortgage-backed investors and therefore banks raising rates so that investors could clean-up their balance sheets before year-end and banks could close the loans in their pipeline by December 31. Folks who had an opportunity at a 4.125% rate but wanted to wait until rates were at 4.000%. By December, 30 Year Fixed Rates were at  4.860%.

I thought that the same thing would happen this year…..It is obvious that I was completely wrong!!! If you look where rates are today hovering around 4.000% two weeks after Turkey Day, it makes you wonder if there will be an uptick of rates by year-end. Why are we so fortunate? We should send a special thanks to the European Union. From the Greek (or was it Italian) debt crisis to the threatened down grade of fifteen (15) European countries by Standard & Poor’s today, there has been nothing but bad news about European sovereign debt and banks. Because Europe has not found a solution to its debt problems, investors have continued to take a flight to quality by buying treasury bonds and mortgage-backed securities. That has kept mortgage rates low up until now and will likely keep rates low into the New Year as it seems unlikely that Europe will solve its problems before then.

So I was SOOOO wrong about rates going up in November, but it is SOOO good for people looking to buy a home or refinance their mortgage.

30 Year Fixed Rate Mortgage Rates

See video of Steven Calk CEO of Chicago Bancorp advocate for less regulation to attract home buyers

Steve Calk, Chairman and CEO of Chicago Bancorp was interviewed by Fox Business about the current state of the mortgage and housing markets. Please click link below to see full video.

http://video.foxbusiness.com/v/1218724955001/chicago-bancorp-ceo-good-time-to-buy-a-home/

Some of the highlights of Steve’s interview include:

• Low rates will not be around forever
• Now is a good time to purchase a home for the first time home buyer
• Regulation is putting at risk the 30 Year Fixed Rate mortgage
• Lenders such as Bank of America and MetLife have left the wholesale mortgage market due to the cost of excessive regulation
• If the secondary market for mortgages, now run by Freddie and Fannie, are not protected, the mortgage market will become dominated by portfolio lenders and community banks
• These lenders have no interest in providing thirty year fixed rate mortgages and the only product offerings could be Adjustable Rate Mortgages
• Regulators have now begun auditing the mortgages of homeowners who are paying their bills on time
• Rather than auditing good borrowers, the government should be directly using these funds toward supporting the housing market, which will put more money into the economy
• If you are on the fence about buying a home, now is the time to act
• You have an opportunity to lock in the best rate of your life and rates will not stay this low forever