Posted on 08/19/2013 12:42:37 PM PDT by whitedog57
The 10 year Treasury yield has risen 77% since May 2nd.
ust10081913a
And mortgage rates (Bankrate 30yr Fixed-rate) are up 32% since May 2nd.
t10b30081913
As refinancing volumes plummet, lenders are trying to extend the home financing boom by pitching adjustable-rate mortgages to borrowers, harkening back to the pre-crisis boom years.
Applications for adjustable-rate loans now make up 6% of mortgage loan requests, up from 3% at the beginning of the year, though still well below the 32% peak in 2004, according to the Mortgage Bankers Association.
Choosing an adjustable-rate mortgage would seem counterintuitive when interest rates are rising. But the spread between average starting rates on hybrid ARMs and 30-year fixed mortgage rates has widened in the past few months, making the ARMs more attractive for borrowers who want to cut their monthly bills. (Hybrid ARMs have rates that are set at a fixed rate for a limited time — typically five or seven years — before resetting higher.)
Banks are definitely doing more ARMs because they’re selling the consumer what they’re asking for, which is a lower monthly payment,” says Bob Caruso, an executive managing director at Lender Processing Services. “It’s like it was several years ago where customers buy the lowest possible payment, not knowing the consequences.
The 5/1 ARM rose dramatically after May 2nd as well.
brarms10yrt
The spread between the 5/1 ARM and the 30 year fixed-rate mortgage is 110 basis points. In other words, ARMs are cheaper than FRMs.
amrfrmsp081913
Now you can see why ARMs are in demand.
With all the part time work ... and no health care being offered by companies .... what will insurers do now?
Will the competition REALLY work to the consumer's advantage ?
Speaking of prosperity.. how much would you pay me to post them
stolen charts you depend so much on? You obviously are incapable
of performing even the simplest HTML task. I can do that for you.
Worse than that, WD is too lazy to even jettison the left-over tags from the pics when he posts the article. Now THAT is lazy!
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