Long-term rates rose this week, mortgages up to 5.25 percent even with a 1 percent origination fee. Refinance demand, fear of massive sales of Treasury bonds ahead, and a new banking freeze combined to do the damage. Refinance demand is big, but not comparable to 2003. Yes, the industry is 75 percent smaller, but this time only the very best applicants have access to good rates. Treasury cash-raising may be a problem, but spreads to mortgages are still very wide, near the 2008 record of 3 percent, and the Fed will begin to buy Treasurys shortly. I think the central cause of the mortgage-rate rise is the new deterioration among banks. Rates rose simultaneously with news late last week that Citi and BofA are toast. By late fall, banks looked as frozen as frozen can be, but never und...
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