New Jumbo conforming rates

[NotCranky]

Daniel,
You seem like the man to ask a question I have.

Relative to other factors how much does simple supply and demand affect mortgage rates? We have recession and very little buying. Most conservative people who have mortgages are locked into pretty good terms. On the other hand there is supposedly a credit crunch which may just be more of what davelj(pigg regular) called a ” shitty asset crisis” or something like that.

The idea kind of floats around here that rates going up will drive prices down further I am wondering if demand for mortgage money as houses fall and when the economic outlook improves doesn’t have a counter effect to that notion in a relative way of course, dependent on other variables perhaps?

[Eugene]

I think it works like this:

Market sets rate differential between “riskless” treasury bonds and “risky” mortgage bonds, based on risk expectations.

Supply and demand laws move the whole structure up or down. Falling demand for mortgage money – fewer bonds of all kinds being sold – interest rates on everything go down, from 10 year treasury to jumbo MBS. Rising demand for fixed-income securities (flight to safety) – same effect.

[Eugene]

I think it works like this:

Market sets rate differential between “riskless” treasury bonds and “risky” mortgage bonds, based on risk expectations.

Supply and demand laws move the whole structure up or down. Falling demand for mortgage money – fewer bonds of all kinds being sold – interest rates on everything go down, from 10 year treasury to jumbo MBS. Rising demand for fixed-income securities (flight to safety) – same effect.

[Eugene]

I think it works like this:

Market sets rate differential between “riskless” treasury bonds and “risky” mortgage bonds, based on risk expectations.

Supply and demand laws move the whole structure up or down. Falling demand for mortgage money – fewer bonds of all kinds being sold – interest rates on everything go down, from 10 year treasury to jumbo MBS. Rising demand for fixed-income securities (flight to safety) – same effect.

[Eugene]

I think it works like this:

Market sets rate differential between “riskless” treasury bonds and “risky” mortgage bonds, based on risk expectations.

Supply and demand laws move the whole structure up or down. Falling demand for mortgage money – fewer bonds of all kinds being sold – interest rates on everything go down, from 10 year treasury to jumbo MBS. Rising demand for fixed-income securities (flight to safety) – same effect.

[Eugene]

I think it works like this:

Market sets rate differential between “riskless” treasury bonds and “risky” mortgage bonds, based on risk expectations.

Supply and demand laws move the whole structure up or down. Falling demand for mortgage money – fewer bonds of all kinds being sold – interest rates on everything go down, from 10 year treasury to jumbo MBS. Rising demand for fixed-income securities (flight to safety) – same effect.

[barnaby33]

Nice summary of the new Jumbo’s from Mr Mortgage aka Hedgie on TF.

Josh

[barnaby33]

Nice summary of the new Jumbo’s from Mr Mortgage aka Hedgie on TF.

Josh

[barnaby33]

Nice summary of the new Jumbo’s from Mr Mortgage aka Hedgie on TF.

Josh

[barnaby33]

Nice summary of the new Jumbo’s from Mr Mortgage aka Hedgie on TF.

Josh

[barnaby33]

Nice summary of the new Jumbo’s from Mr Mortgage aka Hedgie on TF.

Josh

[JWM in SD]

Thanks Josh, that was pretty interesting. I didn’t realize that the FED had the stats published so explicitly for the public to see. I think it bolsters my argument that Bernanke knows full well that he can’t stop decline of house prices and the onslaught of credit contraction in the end. All he can do is delay and lessen the pain like giving a terminal patient more morphine to make the final days more tolerable.

[JWM in SD]

Thanks Josh, that was pretty interesting. I didn’t realize that the FED had the stats published so explicitly for the public to see. I think it bolsters my argument that Bernanke knows full well that he can’t stop decline of house prices and the onslaught of credit contraction in the end. All he can do is delay and lessen the pain like giving a terminal patient more morphine to make the final days more tolerable.

[JWM in SD]

Thanks Josh, that was pretty interesting. I didn’t realize that the FED had the stats published so explicitly for the public to see. I think it bolsters my argument that Bernanke knows full well that he can’t stop decline of house prices and the onslaught of credit contraction in the end. All he can do is delay and lessen the pain like giving a terminal patient more morphine to make the final days more tolerable.

[JWM in SD]

Thanks Josh, that was pretty interesting. I didn’t realize that the FED had the stats published so explicitly for the public to see. I think it bolsters my argument that Bernanke knows full well that he can’t stop decline of house prices and the onslaught of credit contraction in the end. All he can do is delay and lessen the pain like giving a terminal patient more morphine to make the final days more tolerable.

[Author]

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