Increased activity in the mortgage market since the GDP revision July 29 has created a noticeable gap between the Primary (borrower) market and the Secondary (Investor) market, as indicated by the wider “spread” shown in Fig.1. You’ll see it’s now almost twice as wide as it was prior to the release, and it’s at the the highest levels we have seen since Oct. 2010.

It was shortly after the last spread widening that we saw rates increase from 4.20% on Nov 20 to 5.19% on Dec 15. The magnitude and the rapid pace of that rate increase caught many market participants by surprise.

“Current Coupon,” as shown below, is represented by the yield on securities guaranteed by Fannie Mae. Loans made to borrowers represented by “30yr Fixed” are eventually packaged into these securities. The “spread” indicates that rates to borrowers could have declined even more than their current levels but instead have remained elevated (despite falling) because …

Average mortgage rates fell substantially week-over-week  according to the LendingTree Weekly Mortgage Rate Pulse, which tracks the lowest and average mortgage rates offered by lenders on the LendingTree network.

On August 2, average home loan rates offered by LendingTree network lenders were 4.56% (4.81% APR) for 30-year fixed mortgages, 3.80% (4.20% APR) for 15-year fixed mortgages and 3.31% (3.55% APR) for 5/1 adjustable rate mortgages (ARM). Average rates for 30-year fixed mortgages showed an 18% dip while 15-year fixed and 5/1 ARM rates also decreased week-over-week.

On the same day, the lowest mortgage rates offered by lenders on the LendingTree network were 4.25 percent (4.39% APR) for a 30-year fixed mortgage, 3.25 percent (3.49% APR) for a 15-year fixed mortgage and 2.63 percent (3.08% APR) for a 5/1 ARM, showing a 13% decrease in rates from last week across the board.

“Mortgage rates on the LendingTree marketplace have unexpectedly dropped to the …

As we approach the Oct 1st deadline when we expect to see the repeal of the higher loan limits for conforming originations, expect true jumbo loans to regain market share. Currently the highest conforming jumbo loan limit is set to the lower of 175% ($729,750) of the national loan limit ($417,000) or 125% of the local area median price. On Oct 1st, those limits will revert back to the lower of 150% ($625,500) or 115% of the local area median price. Below, the heat map shows the areas that will be most affected.

In advance of the Oct 1st deadline, it is expected loan originators will be paring down conforming jumbo loans in the more than 250 counties affected, thus reducing their pipelines in conforming jumbo and seeing higher demand of true jumbo loans over the next 45‐60 days. During the last six months of 2010 the variance from the mean for both conforming and …