“What goes up, must come down. Spinning Wheel, got to go ’round“
- Blood, Sweat and Tears
This is panic selling that we’re seeing in the fixed-income securities market. I knew it would happen but I was early. The 30-year fixed rate mortgage was at 5.625%, nine days ago. Yesterday, it went to 6.0%. Today a 30-year fixed rate mortgage is at 6.25%. Expect Miami mortgage rates to be above 6.0% for the next two weeks; we should see them creep down by the end of June to the sub-6 level.
What should you do if you can’t wait? Lock in a 5/1 ARM. Today, that rate is just 5.375%. That’s almost a full percentage point discount to the 30-year fixed rate loan.
Rates will improve…but it’s gonna get ugly before it gets better.
