30 Year Fixed Rate Mortgage Plumbs Fresh Record Lows As Mortgage Market Anticipates New QE

The 30 year Freddie Fixed Rate Mortgage has just printed on the south side of 4.50%, at 4.49%: a fresh new all time record. The spread to the 10 year Bond (which, yes, is tighter once again, flirting as usual with the 2.9% barrier), is about 158 bps. Of course, should the Fed recommence QE, which is now just a matter of politically self-destructive time, the spread will collapse, the 10 Year will plunge, and the administration will bankrupt all mortgage lenders (who are idiotic enough not to have been subsumed by the bankrupt GSE Borg) who will soon be forced to lend a 30 year mortgage at something around 3%. Alas, by the time the administration realizes that it does not matter what rate the mortgage is, and that the security of having a 1) cash flow and 2) job is far more important, and still as missing as always, it will be too late.


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