March 21 - Mortgage rates moved to their highest level since December- but whether this is the beginning of a sustained move above historically low rates is the subject of much debate. Bobbi Rebell reports.
Loan processors at The Manhattan Mortgage Company in New York City are keeping busy these days - working to get their clients the loans they want- before time- potentially- runs out. Mortgage rates have kicked up to their highest levels since December. Firm president Melissa Cohn: SOUNDBITE: MELISSA COHN, PRESIDENT, THE MANHATTAN MORTGAGE COMPANY (ENGLISH) SAYING: "The clients are not as happy because mortgage rates have moved up actually very quickly. Two weeks ago the 10-year Treasury was at 1.9 percent, today it's at 2.3 percent; so that's almost a half a percent increase in yield and mortgage rates have gone up approximately a quarter to three-eighths of a percent over the course of the past two weeks. Pushing 30-year fixed mortgage rates to an average 4.19 percent last week according to the Mortgage Bankers Association. In turn applications for U.S. home mortgages tumbled- in large part due to a drop in refinancing demand. The housing market remains on shaky ground. Existing home sales fell last month, despite signs of recovery. Cohn says the higher rates could help the housing market- because it could get buyers off the sidelines to lock in rates. Higher rates could also boost profit for lenders, but that does not mean banks will loosen their lending standards. SOUNDBITE: MELISSA COHN, PRESIDENT, THE MANHATTAN MORTGAGE COMPANY (ENGLISH) SAYING: "I don't believe that lending standards will change wherever the rate markets go I mean rates have been all over the place over the course of the past two years when banks really tightened their guidelines and those guidelines haven't changed to matter where rates have gone." But the Federal Reserve has pledged to keep rates low- in part as a way to help the housing market- and so some advise consumers to take a deep breath before jumping into a new loan. Dan Alpert of Westwood Capital: SOUNDBITE: DAN ALPERT, MANAGING PARTNER, WESTWOOD CAPITAL (ENGLISH) SAYING: "The truth is I wouldn't necessarily run out to do a 30-year mortgage today. I'd probably wait another month to see what happens. It's very unlikely in my opinion that those rates are going to widen out even further. ' But even at these so-called higher rates, financing is cheap by historic standards, if only for the borrowers who qualify. Bobbi Rebell, Reuters.