Tag Archives: Mortgage rates

Mortgage Applications Collapse To 18-Year Lows

After sliding 2.1% the prior week, mortgage applications collapsed 7.1% last week as mortgage rates topped 5.00%

Ignoring the collapses during the Xmas week of 12/29/00 and 12/26/14, this is the lowest level of mortgage applications since September 2000…

https://www.zerohedge.com/sites/default/files/inline-images/2018-10-17_5-01-53.jpg?itok=w_KjBWqP

The Refinance Index decreased 9 percent from the previous week

The seasonally adjusted Purchase Index decreased 6 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 2 percent higher than the same week one year ago.

Perhaps this is why…

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to its highest level since February 2011, 5.10 percent, from 5.05 percent, with points increasing to 0.55 from 0.51 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.

https://www.zerohedge.com/sites/default/files/inline-images/2018-10-17_5-09-19.jpg?itok=Ic6nVlc8

Still, The Fed should keep on hiking, right? Because – “greatest economy ever..” and so on…

As we noted previously, the refinance boom that rescued so many in the post-2008 ‘recovery’ is now over. If rates hit 5%, the pool of homeowners who would qualify for and benefit from a refinance will shrink to 1.55 million, according to mortgage-data and technology firm Black Knight Inc. That would be down about 64% since the start of the year, and the smallest pool since 2008.

Naturally, hardest hit by the rising rates will be young and first-time buyers who tend to make smaller down payments than older buyers who have built up equity in their previous homes, and middle-income buyers, who can least afford the extra cost. Khater said that about 45% of the loans that Freddie Mac is backing are to first-time buyers, up from about 30% normally, which also means that rising rates could have an even bigger impact on the market than usual.

Younger buyers are also more likely to be shocked by higher rates because they don’t remember when rates were more than 18% in the early 1980s, or more recently, the first decade of the 2000s, when rates hovered around 5% to 7%.

“There’s almost a generation that has been used to seeing 3% or 4% rates that’s now seeing 5% rates,” said Vishal Garg, founder and chief executive of Better Mortgage.

Source: ZeroHedge

***

Mortgage Refinancing Applications Remain In Death Valley (Hurricanes Michael And Jerome)

Between Hurricanes Michael and Hurricane Jerome (Powell), mortgage refinancing applcations are taking a big hit.

The Mortgage Bankers Association (MBA) refinancing applications index fell 9% from the previous week as 30-year mortgage rate continued to rise.

https://confoundedinterestnet.files.wordpress.com/2018/10/mbarefirates.png?w=624&h=449

Mortgage purchase applications fell 5.52% WoW, but it is in the “mean season” for mortgage purchase applications and there was a hurricane (Michael). And then you have hurricane Jerome (Powell) battering the mortgage markets.

https://confoundedinterestnet.files.wordpress.com/2018/10/mbastats101718.png?w=624&h=449

In addition to Hurricane (weather and Federal government), there is also the decline in Adjustable Rate Mortgages (ARMs) since the financial crisis.

https://confoundedinterestnet.files.wordpress.com/2018/10/arm.png?w=624&h=449

 

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Mortgage Rates Surge The Most Since Trump’s Election, Hit New Seven Year High

With US consumers suddenly dreading to see the bottom line on their next 401(k) statement, they now have the housing market to worry about.

As interest rates spiked in the past month, one direct consequence is that U.S. mortgage rates, already at a seven-year high, surged by the most since the Trump elections.

According to the latest weekly Freddie Mac statement, the average rate for a 30-year fixed mortgage jumped to 4.9%, up from 4.71% last week and the highest since mid-April 2011. It was the biggest weekly increase since Nov. 17, 2016, when the 30-year average surged 37 basis points.

https://www.zerohedge.com/sites/default/files/inline-images/freddie%20mac%2030y.jpg?itok=S7eDQMPC

With this week’s jump, the monthly payment on a $300,000, 30-year loan has climbed to $1,592, up from $1,424 in the beginning of the year, when the average rate was 3.95%.

Even before this week’s spike, the rise in mortgage rates had cut into affordability for buyers, especially in markets where home prices have been climbing faster than incomes, which as we discussed earlier this week, is virtually all. That’s led to a sharp slowdown in sales of both new and existing homes: last month the NAR reported that contracts to buy previously owned properties declined in August by the most in seven months, as purchasing a new home becomes increasingly unaffordable.

“With the escalation of prices, it could be that borrowers are running out of breath,” said Sam Khater, chief economist at Freddie Mac.

“Rising rates paired with high and escalating home prices is putting downward pressure on purchase demand,” Khater told Bloomberg, adding that while rates are still historically low, “the primary hurdle for many borrowers today is the down payment, and that is the reason home sales have decreased in many high-priced markets.”

https://www.zerohedge.com/sites/default/files/inline-images/housing%20wsj.jpg?itok=qpzf1y-9

Meanwhile, lenders and real-estate agents say that, even now, all but the most qualified buyers making large down payments face borrowing rates of 5%. And while rates have been edging higher in recent months, “the last week we’ve seen an explosion higher in mortgage rates,” said Rodney Anderson, a mortgage lender in the Dallas area quoted by the WSJ.

Meanwhile, the WSJ reports that once-hot markets are showing signs of cooling down. Bill Nelson, president of Your Home Free, a Dallas-based real-estate brokerage, said that in the neighborhoods where he works, the number of homes experiencing price cuts is more than double the number that are going into contract.

The rise in rates could have far-reaching effects for the mortgage industry. Some lenders—particularly non-banks that don’t have other lines of business —could take on riskier customers to keep up their level of loan volume, or be forced to sell themselves. Many U.S. mortgage lenders, including some of the biggest players, didn’t exist a decade ago and only know a low-rate environment, and many younger buyers can’t remember a time when rates were higher.

Meanwhile, in more bad news for the banks, higher rates will kill off any lingering possibility of a refinancing boom, which bailed out the mortgage industry in the years right after the 2008 financial crisis. If rates hit 5%, the pool of homeowners who would qualify for and benefit from a refinance will shrink to 1.55 million, according to mortgage-data and technology firm Black Knight Inc. That would be down about 64% since the start of the year, and the smallest pool since 2008.

Naturally, hardest hit by the rising rates will be young and first-time buyers who tend to make smaller down payments than older buyers who have built up equity in their previous homes, and middle-income buyers, who can least afford the extra cost. Khater said that about 45% of the loans that Freddie Mac is backing are to first-time buyers, up from about 30% normally, which also means that rising rates could have an even bigger impact on the market than usual.

Younger buyers are also more likely to be shocked by higher rates because they don’t remember when rates were more than 18% in the early 1980s, or more recently, the first decade of the 2000s, when rates hovered around 5% to 7%.

“There’s almost a generation that has been used to seeing 3% or 4% rates that’s now seeing 5% rates,” said Vishal Garg, founder and chief executive of Better Mortgage.

Source: ZeroHedge

When The Fed Comes Marching Home: Mortgage Refinancing Applications Killed, Purchase Applications Stalled by Fed Rate Hikes

It was inevitable. Federal Reserve rate hikes and balance sheet shrinkage is having the predictive effect: killing mortgage refinancing applications.

https://confoundedinterestnet.files.wordpress.com/2018/10/mbarefifed1.png?w=624&h=449

And, mortgage purchases applications SA have stalled in terms of growth with Fed rate hikes and balance sheet shrinkage.

https://confoundedinterestnet.files.wordpress.com/2018/10/mbapsa1010.png?w=624&h=449

WASHINGTON, D.C. (October 10, 2018) – Mortgage applications decreased 1.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 5, 2018.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.7 percent on a seasonally adjusted basis from one week earlier. On an un-adjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index decreased 3 percent from the previous week. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The un-adjusted Purchase Index decreased 1 percent compared with the previous week and was 2 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 39.0 percent of total applications from 39.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.3 percent of total applications.

The FHA share of total applications increased to 10.5 percent from 10.2 percent the week prior. The VA share of total applications remained unchanged at 10.0 percent from the week prior. The USDA share of total applications increased to 0.8 percent from 0.7 percent the week prior.

https://confoundedinterestnet.files.wordpress.com/2018/10/mbastats101018.png?w=624&h=449

Yes, The Fed has begun its bomb run.

https://confoundedinterestnet.files.wordpress.com/2018/10/fedbombrun.png?w=624&h=346

Source: Confounded Interest

Higher Mortgage Rates Are Starting To Bite The Housing Market

Authored by Bryce Coward via Knowledge Leaders Capital blog,

Sooner or later, higher mortgage rates (which are keyed off of the 10-year treasury yield) were always bound to start slowing the housing market. It was more a matter of what level of rates would be necessary to take the first bites out of housing. We think the answer is playing out right in front of us. With mortgage rates recently breaching the highest level since 2011, housing data has been coming in on the weak side all year long, and may be set to get even worse in the coming months. Let’s explain…

In the first chart below we show pending home sales (blue line, left axis) overlaid on the 30 year fixed mortgage rate (red line, right axis, inverted, leading by 2 quarters). As we can see, pending home sales are closely inversely related to the level of mortgage rates, and rates lead pending home sales by about two quarters. The breakout in mortgage rates we’ve seen over the last few months portend more weakness in pending sales.

https://www.zerohedge.com/sites/default/files/inline-images/Pic1-1-768x521.jpg?itok=eE-gFiMp

The next chart compares mortgage applications (blue line, left axis) to the 30 year fixed mortgage rate (red line, right axis, inverted) and shows that these two series are also closely inversely related. Higher rates are slowing demand for financing and demand for overall housing. Not exactly a heroic observation, but an important one nonetheless.

https://www.zerohedge.com/sites/default/files/inline-images/Pic2-1-768x524.jpg?itok=LsXSnz7Y

The home builders seem to have caught on, as we would expect. In the next chart we show the 1 year change in private residential construction including improvements  (blue line, left axis) compared to the 30 year fixed mortgage rate (red line, right axis, inverted, leading by 2 quarters). As rates have moved higher this year, new home construction growth has slowed to just 2.5% YoY. If rates are any indication, new home construction growth may turn negative in the months just ahead.

https://www.zerohedge.com/sites/default/files/inline-images/Pic3-2-768x513.jpg?itok=9odYFJvq

To be fair, everything housing related isn’t that bad. Inventory levels, even though they have moved up a lot over the last several years, are still at reasonable levels and well shy of peak bubble levels of 2005-2007. Even so inventory levels may no longer be supportive of housing action.

https://www.zerohedge.com/sites/default/files/inline-images/Pic5-1-768x543.jpg?itok=RRFKoKjm

And these moderate levels of inventory have helped keep prices stable, for now.

https://www.zerohedge.com/sites/default/files/inline-images/Pic4-1-768x520.jpg?itok=QKr386UX

But, housing affordability is taking a nosedive. Here we show the National Association of Realtors housing affordability index (blue line, left axis) against mortgage rates (red line, right axis, inverted, leading by 1 quarter). Up until a few months ago housing affordability was well above trend. But now we’ve moved back to into the range which prevailed from 1991-2004.

https://www.zerohedge.com/sites/default/files/inline-images/Pic6-768x549.jpg?itok=ycTdIKgg

In sum, the effects of higher long-term interest rates are starting to be squarely felt in the housing space. Pending sales, mortgage applications and new construction have all been weak and look set to get even weaker in the quarters to come as the lagged effects of higher mortgage rates set in. Home prices have yet to respond since inventory levels are still moderate, but inventories aren’t the support they were just two years ago. Meanwhile, affordability levels are no longer very supportive. All this suggests that the housing sector, which has been a bright spot of this recovery over the last five or six years, may not be the same source of wealth accumulation and growth over the next few years, or as long as higher mortgage rates continue to take the juice out of this sector.

Source: ZeroHedge

Imagine Mortgage Rates Headed to 6%, 10-Year Yield to 4%, Yield Curve Fails to “Invert,” and Fed Keeps Hiking

Nightmare scenario for the markets? They just shrugged. But home buyers haven’t done the math yet.

There’s an interesting thing that just happened, which shows that the US Treasury 10-year yield is ready for the next leg up, and that the yield curve might not invert just yet: the 10-year yield climbed over the 3% hurdle again, and there was none of the financial-media excitement about it as there was when that happened last time. It just dabbled with 3% on Monday, climbed over 3% yesterday, and closed at 3.08% today, and it was met with shrugs. In other words, this move is now accepted.

Note how the 10-year yield rose in two big surges since the historic low in June 2016, interspersed by some backtracking. This market might be setting up for the next surge:

https://wolfstreet.com/wp-content/uploads/2018/09/US-treasury-yields-10-year-2018-09-19.png

And it’s impacting mortgage rates – which move roughly in parallel with the 10-year Treasury yield. The Mortgage Bankers Association (MBA) reported this morning that the average interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) and a 20% down-payment rose to 4.88% for the week ending September 14, 2018, the highest since April 2011.

And this doesn’t even include the 9-basis-point uptick of the 10-year Treasury yield since the end of the reporting week on September 14, from 2.99% to 3.08% (chart via Investing.com; red marks added):

https://wolfstreet.com/wp-content/uploads/2018/09/US-mortgage-rates-MBA-2011_2018-09-19.png

While 5% may sound high for the average 30-year fixed rate mortgage, given the inflated home prices that must be financed at this rate, and while 6% seems impossibly high under current home price conditions, these rates are low when looking back at rates during the Great Recession and before (chart via Investing.com):

https://wolfstreet.com/wp-content/uploads/2018/09/US-mortgage-rates-MBA-2000_2018-09-19.png

And more rate hikes will continue to drive short-term yields higher, even as long-term yields for now are having trouble keeping up. And these higher rates are getting baked in. Since the end of August, the market has been seeing a 100% chance that the Fed, at its September 25-26 meeting, will raise its target for the federal funds rate by a quarter point to a range between 2.0% and 2.25%, according to CME 30-day fed fund futures prices. It will be the 3rd rate hike in 2018.

And the market now sees an 81% chance that the Fed will announced a 4th rate hike for 2018 after the FOMC meeting in December (chart via Investing.com, red marks added):

https://wolfstreet.com/wp-content/uploads/2018/09/US-Fed-rate-hike-probability-Dec-meeting-2018-09-19.png

The Fed’s go-super-slow approach – everything is “gradual,” as it never ceases to point out – is giving markets plenty of time to prepare and adjust, and gradually start taking for granted what had been considered impossible just two years ago: That in 2019, short-term yields will be heading for 3% or higher – the 3-month yield is already at 2.16% — that the 10-year yield will be going past 4%, and that the average 30-year fixed rate mortgage will be flirting with a 6% rate.

Potential home buyers next year haven’t quite done the math yet what those higher rates, applied to home prices that have been inflated by 10 years of interest rate repression, will do to their willingness and ability to buy anything at those prices, but they’ll get around to it.

As for holding my breath that an inverted yield curve – a phenomenon when the 2-year yield is higher than the 10-year yield – will ominously appear and make the Fed stop in its tracks? Well, this rate-hike cycle is so slow, even if it is speeding up a tiny bit, that long-term yields may have enough time to go through their surge-and-backtracking cycles without being overtaken by slowly but consistently rising short-term yields.

There has never been a rate-hike cycle this slow and this drawn-out: We’re now almost three years into it, and rates have come up, but it hasn’t produced the results the Fed is trying to achieve: A tightening of financial conditions, an end to yield-chasing in the credit markets and more prudence, and finally an uptick in the unemployment rate above 4%. And the Fed will keep going until it thinks it has this under control.

Source: by Wolf Richter | Wolf Street

Understanding The Interest Rate Headwind Facing Housing

There are a large number of public and private services that measure the change in home prices. The algorithms behind these services, while complex, are primarily based on recent sale prices for comparative homes and adjusted for factors like location, property characteristics and the particulars of the house. While these pricing services are considered to be well represented measures of house prices, there is another important factor that is frequently overlooked despite the large role in plays in house prices.

In August 2016, the 30-year fixed mortgage rate as reported by the Federal Reserve hit an all-time low of 3.44%. Since then it has risen to its current level of 4.50%. While a 1% increase may appear small, especially at this low level of rates, the rise has begun to adversely affect housing and mortgage activity. After rising 33% and 22% in 2015 and 2016 respectively, total mortgage originations were down -16% in 2017. Further increases in rates will likely begin to weigh on house prices and the broader economy. This article will help quantify the benefit that lower rates played in making houses more affordable over the past few decades. By doing this, we can appreciate how further increases in mortgage rates might adversely affect house prices.

Lower Rates

In 1981 mortgage rates peaked at 18.50%. Since that time they have declined steadily and now stands at a relatively paltry 4.50%. Over this 37-year period, individuals’ payments on mortgage loans also declined allowing buyers to get more for their money. Continually declining rates also allowed them to further reduce their payments through refinancing. Consider that in 1990 a $500,000 house, bought with a 10%, 30-year fixed rate mortgage, which was the going rate, would have required a monthly principal and interest payment of $4,388. Today a loan for the same amount at the 4.50% current rate is almost half the payment at $2,533.

The sensitivity of mortgage payments to changes in mortgage rates is about 9%, meaning that each 1% increase or decrease in the mortgage rate results in a payment increase or decrease of 9%. From a home buyer’s perspective, this means that each 1% change in rates makes the house more or less affordable by about 9%.

Given this understanding of the math and the prior history of rate declines, we can calculate how lower rates helped make housing more affordable. To do this, we start in the year 1990 with a $500,000 home price and adjust it annually based on changes in the popular Case-Shiller House Price Index. This calculation approximates the 28-year price appreciation of the house. Second, we further adjust it to the change in interest rates. To accomplish this, we calculated how much more or less home one could buy based on the change in interest rates. The difference between the two, as shown below, provides a value on how much lower interest rates benefited home buyers and sellers.

https://www.zerohedge.com/sites/default/files/inline-images/1-house-inflation.png?itok=naYdkoxQData Courtesy: S&P Core Logic Case-Shiller House Price Index

The graph shows that lower payments resulting from the decline in mortgage rates benefited buyers by approximately $325,000. Said differently, a homeowner can afford $325,000 more than would have otherwise been possible due to declining rates.

The Effect of Rising Rates

As stated, mortgage rates have been steadily declining for the past 37 years. There are some interest rate forecasters that believe the recent uptick in rates may be the first wave of a longer-term change in trend.  If this is, in fact, the case, quantifying how higher mortgage rates affect payments, supply, demand, and therefore the prices of houses is an important consideration for the direction of the broad economy.

The graph below shows the mortgage payment required for a $500,000 house based on a range of mortgage rates. The background shows the decline in mortgage rates (10.00% to 4.50%) from 1990 to today.

https://www.zerohedge.com/sites/default/files/inline-images/2-pay-per-mtge.png?itok=FaM3amlH

To put this into a different perspective, the following graph shows how much a buyer can afford to pay for a house assuming a fixed payment ($2,333) and varying mortgage rates. The payment is based on the current mortgage rate.

https://www.zerohedge.com/sites/default/files/inline-images/3-payments.png?itok=QlXlfTjL

As the graphs portray, home buyers will be forced to make higher mortgage payments or seek lower-priced houses if rates keep rising.

Summary

The Fed has raised interest rates six times since the end of 2015. Their forward guidance from recent Federal Open Market Committee (FOMC) meeting statements and minutes tells of their plans on continuing to do so throughout this year and next. Additionally, the Fed owns over one-quarter of all residential mortgage-backed securities (MBS) through QE purchases. Their stated plan is to reduce their ownership of those securities over the next several quarters. If the Fed continues on their expected path with regard to rates and balance sheet, it creates a significant market adjustment in terms of supply and demand dynamics and further implies that mortgage rates should rise.

The consequences of higher mortgage rates will not only affect buyers and sellers of housing but also make borrowing on the equity in homes more expensive. From a macro perspective, consider that housing contributes 15-18% to GDP, according to the National Association of Home Builders (NAHB). While we do not expect higher rates to devastate the housing market, we do think a period of price declines and economic weakness could accompany higher rates.

This analysis is clinical using simple math to illustrate the relationship, cause, and effects, between changes in interest rates and home prices. However, the housing market is anything but a simple asset class. It is among the most complex of systems within the broad economy. Rising rates not only impact affordability but also the general level of activity which feeds back into the economy. In addition to the effect that rates may have, also consider that the demographics for housing are challenged as retiring, empty-nest baby boomers seek to downsize. To whom will they sell and at what price?

If interest rates do indeed continue to rise, there is a lot more risk embedded in the housing market than currently seems apparent as these and other dynamics converge. The services providing pricing insight into the value of the housing market may do a fine job of assessing current value, but they lack the sophistication required to see around the next economic corner.

Source: ZeroHedge

Highest Mortgage Rates In 8 Years Unleash Bidding Wars, Home Buying Frenzy

Yesterday when looking at the latest MBA Mortgage Application data, we found that, as mortgage rates jumped to the highest level since 2011, mortgage refi applications, not unexpectedly tumbled to the lowest level since the financial crisis, choking off a key revenue item for banks, and resulting in even more pain for the likes of Wells Fargo.

https://www.zerohedge.com/sites/default/files/inline-images/2018-05-16_5-09-36.jpg

Today, according to the latest Freddie Mac mortgage rates report, after plateauing in recent weeks, mortgage rates reversed course and reached a new high last seen eight years ago as the 30-year fixed mortgage rate edged up to 4.61% matching the highest level since May 19, 2011.

https://www.zerohedge.com/sites/default/files/inline-images/30Year%20freddie%20mac.jpg?itok=OzIa9_LI

But while the highest mortgage rates in 8 years are predictably crushing mortgage refinance activity, they appears to be having the opposite effect on home purchases, where there is a sheer scramble to buy, and sell, houses. As Bloomberg notes, citing brokerage Redfin, the average home across the US that sold last month went into contract after a median of 36 only days on the market – a record speed in data going back to 2010.

https://www.zerohedge.com/sites/default/files/inline-images/redfin%20days%20market.jpg?itok=jLXe8kQO

To Sam Khater, chief economist of Freddie Mac, this was a sign of an economy firing on all cylinders: “This is what happens when the economy is strong,” Khater told Bloomberg in a phone interview. “All the higher-rate environment does is it either causes them to try and rush or look at different properties that are more affordable.”

Of course, one can simply counter that what rising rates rally do is make housing – for those who need a mortgage – increasingly more unaffordable, as a result of the higher monthly mortgage payments. Case in point: with this week’s jump, the monthly payment on a $300,000, 30-year loan has climbed to $1,540, up over $100 from $1,424 in the beginning of the year, when the average rate was 3.95%.

https://www.zerohedge.com/sites/default/files/inline-images/median%20sale%20price%20refin.jpg?itok=E_RTfL65

As such, surging rates merely pulls home demand from the future, as potential home buyers hope to lock in “lower” rates today instead of risking tomorrow’s rates. It also means that after today’s surge in activity, a vacuum in transactions will follow, especially if rates stabilize or happen to drop. Think “cash for clunkers”, only in this case it’s houses.

Meanwhile, the short supply of home listings for sale and increased competition is only making their purchases harder to afford: according to Redfin, this spike in demand and subdued supply means that home prices soared 7.6% in April from a year earlier to a median of $302,200, and sellers got a record 98.8% of what they asked on average.

Call it the sellers market.

Furthermore, bidding wars are increasingly breaking out: Minneapolis realtor Mary Sommerfeld said a family she works with offered $33,000 more than the $430,000 list price for a home in St. Paul. The listing agent gave her the bad news: There were nine offers and the family’s was second from the bottom.

For Sommerfeld’s clients, the lack of inventory is a bigger problem than rising mortgage rates. If anything, they want to close quickly before they get priced out of the market — and have to pay more interest.

“I don’t think it’s hurting the buyer demand at all,” she said. “My buyers say they better get busy and buy before the interest rates go up any further.”

Then again, in the grand scheme of things, 4.61% is still low. Kristin Wilson, a loan officer with Envoy Mortgage in Edina, Minnesota, tells customers to keep things in perspective. When she bought a house in the early 1980s, the interest on her adjustable-rate mortgage was 12 percent, she said.

“One woman actually used the phrase: ‘Rates shot up,’” Wilson said. “We’ve been spoiled after a number of years with rates hovering around 4 percent or lower.”

Of course, if the average mortgage rate in the America is ever 12% again, look for a real life recreation of Mad Max the movie in a neighborhood near you…

Source: ZeroHedge