what is really going on in the market and what can we expect with rates in clearwater, largo , palm harbor, tarpon springs
Didier Malagies • March 20, 2020
all you need to know what is going on with the current crisis
This is what really is going on in the market! read and learn
really need to share with my subscribers, so enjoy the read and know good times will come eventually
The MOST Volatile Day For Mortgages
Mar 19 2020, 5:42PM
By Matthew Graham
Today was the most volatile day in the history of the mortgage market in many regards. There were days in the early 80's that saw rates move by similar amounts, but none of them saw the underlying market for mortgage bonds move back and forth by such gigantic amounts. What does this mean for you and your ability to buy or refi at the rates you may have heard about recently?
That depends on the rates you've heard about recently! Many borrowers mistakenly believe the Fed's recent rate cuts mean that mortgage rates have fallen by an equal amount. In fact, many loan originators report getting calls about 0% rates. Unequivocally, there are no 0% mortgage rates! If you're not 100% sure about why that's the case, please read this article.
If you're participating in a more realistic reality, you may have heard about some exceptionally low rates nonetheless. You may have even discussed these rates with your mortgage professional of choice. For flawless scenarios and depending on the details, fixed rates in the low 3% range were a thing for a few hours of a few days recently. That's no longer the case--not even close.
Unless you make a habit of watching real-time bond trading it's hard to convey just how INSANE the past 2 weeks have been. I'll put it this way, by Friday of last week, after watching this stuff for nearly 2 decades, I was sure I'd just witnessed the craziest day for mortgage bonds (the stuff that dictates most of the movement in mortgage rates) that I'd ever seen or possibly would ever see. As of yesterday, this week was already crazier and today took it to another level. Today ALONE, as one individual DAY was more volatile than the entirety of last week! And by a wide margin at that.
Today alone, we saw a mortgage bond trading range that was as wide as last week's. Moreover there were 5 massive changes in the direction of movement. To oversimplify, the cost of any given mortgage changed massively, 5 times today. In more normal times, this would mean that your available rate went up or down massively, 5 times today. The reality is that most lenders began the day quoting significantly higher rates than we've seen recently, and the average change only made that rate much MUCH higher.
The Fed cut rates to zero. They announced massive bond buying. Stocks have been tanking (which is usually good for rates). And you're telling me, after all that, mortgage rates are significantly HIGHER?!
Yes... I'm absolutely telling you that. I track the rates of more lenders more closely than anyone you've talked to. These past 2 weeks and especially today have been the biggest, most counterintuitive messes I could have ever imagined. The mortgage market is in absolute CHAOS! Regular readers will know I'm not prone to all-caps diatribes and excessive exclamation points. To whatever extent I've actually been able to take the time to write articles this week, the ratios of all-caps and exclamation is through the roof.
Why is the mortgage market in chaos? There are complex reasons and simple reasons. First off, this isn't 2008. If any lenders end up struggling to survive this environment, it won't be for the same reasons as 2008 and the systemic risks are a non-issue. To be sure, there is tremendous stress in financial markets, but whereas the mortgage sector CAUSED the problem in 2008, it's more of an innocent bystander this time around.
Coronavirus has created an unprecedented situation for the entire rates market (not just mortgages, but US Treasuries and everything else). Relative to some classes of bonds, mortgage rates aren't seeing nearly as much drama, in fact. Liquidity is one major issue. That refers to the ability to buy or sell whatever you want to buy or sell at the price you'd expect. It also refers to the ability to liquidate whatever you need to sell in order to raise CASH.
AND GUESS WHAT HAPPENS WHEN EVERYONE AROUND THE WORLD SIMULTANEOUSLY DECIDES CORONAVIRUS IS A HUGE DEAL?
Everyone wants cash. Before you run out to the bank to try to beat your neighbor to the ATM, I'm not talking about green cash. That won't do you any good in the zombie apocalypse anyway. I'm talking about a cash position in financial markets--the most liquid, nimble place an investor in the US can be. Outside of situations where the value of the American dollar is rapidly deteriorating, there is no other asset that offers a better combination of immunity from risk and liquidity/flexibility. So when no one knows what in the world is going to happen next with the rapid-onset recession (something that's already begun, even if economic reports will take months to confirm it), cash reigns supreme.
Investors are selling mortgage bonds hand over fist for cash. They're selling lots of other stuff for cash too. Investors that would typically buy mortgage bonds are either not in a position to buy at all, or are simply not willing to buy for the prices being charged (i.e. no liquidity). Lower prices for mortgage bonds = higher rates.
This phenomenon really began last week, but the Fed threw a big wrench in the works last Sunday with its emergency announcement. For the first time in years, they jumped back into the business of buying mortgage bonds outright (something they'd previously said there were not interested in doing again). You can take the Fed at their word there. They would NOT be buying mortgages if there wasn't serious funding stress in the mortgage market. Again, this funding stress isn't resulting from mortgages being bad or "toxic" in some way. If you hear any mentions of that, it's nonsense.
The issue, again, stems from the supply and demand situation being completely unprecedented. Just like panicked masses suddenly buy toilet paper despite not planning on using the restroom any more than normal, the herd mentality in financial markets is to buy nothing and sell everything (except for the talking heads that attempt to convince people it's a good time to buy stocks amid a freefall--a broken clock strategy that is wrong again and again until it's finally right). Things were so intense at one point today that the Fed had to announce major additions to its previously announced schedule of MBS buying.
NOTABLY, the Fed is not doing anything it said it wouldn't do on Sunday afternoon. In fact, it purposely left open the possibility to add additional buying as needed to support the normal functioning of the mortgage market. And therein lies the heart of the matter. Mortgage markets progressively freak out (other markets too), and the Fed continually steps up to offer reassurance. Its will is strong and its tools are capable in this regard. When the reassurance is first announced, markets move in the opposite direction from "freaked out." In the case of mortgages, this would normally mean "lower rates," but in the current case, it's only allowing lenders to temporarily stop the bleeding.
EVENTUALLY, this song and dance of market panic and Fed reassurance will level-off. There is absolutely a limit here. But this is also absolutely a major adjustment for financial markets. We're suddenly faced with a totally unexpected need to radically revalue nearly every asset class faster than it's ever needed to be done, and with less certainty about how to do it. No one knows what the supply and demand for mortgage bonds, let alone anything else (except maybe toilet paper?) will look like in a few days, weeks, or months.
While we can logically conclude that a massive economic recession should coincide with very low rates, there's too much uncertainty and too great a need for short-term cash for rates to simply drop to the levels we may eventually see. As for how long it takes rates to get back to where they "should" be, it's impossible to know. Until last week, I would have said "days." Until today, I would have confidently said "weeks, at worst." I'm getting increasingly hesitant to pin a timeframe on it. After all, the sudden shift in reality versus expectations is at the heart of the issue for financial markets. The safest bet at this point is to conclude that we haven't seen the last of mortgage rates near the recent all-time lows. We don't know exactly when we'll see them again. The best case scenario is quite palatable and the worst case scenario is something we don't even want to consider--exactly like the range of outcomes when Coronavirus became a household name weeks ago.
Bottom line: rates are as high as they've been in NEARLY A YEAR. If you're seeing a news article that references Freddie Mac's weekly survey, it's based on data that stopped being relevant on Tuesday. A lot has changed since then.
Check out our other helpful videos to learn more about credit and residential mortgages.
Is Refinancing Right for You? Unlocking Cash & Financial Freedom Feeling squeezed? Juggling multiple debts with varying interest rates? Dreaming of that kitchen remodel you've been putting off? Or maybe you just need a little extra breathing room in your monthly budget? You're not alone. Many homeowners find themselves in situations where they need access to cash, and for a significant portion of them, the answer is refinancing their mortgage. In fact, last year, a whopping 40% of all mortgage activity was refinances! But what exactly is driving this trend, and could refinancing be the right move for you ? Refinancing to Unlock Cash: Home Improvements, Debt Consolidation, and More One of the primary drivers behind the refinance boom is the desire to tap into home equity. Your home is likely your largest asset, and as you pay down your mortgage and your property value increases, you build equity. A cash-out refinance allows you to borrow against that equity, receiving the difference in cash at closing. Home Renovations and Upgrades Imagine finally getting that dream kitchen! Or adding a much-needed bathroom. Home improvements not only enhance your living space, but they can also significantly increase your home's value. Instead of relying on high-interest credit cards or personal loans, a cash-out refinance provides a more affordable way to finance these projects. Debt Consolidation: Streamline Your Finances Are you overwhelmed by multiple credit card bills, student loans, or other high-interest debts? A cash-out refinance can be a powerful tool for debt consolidation. By using the cash from your refinance to pay off these debts, you can simplify your finances, potentially lower your overall interest rate, and reduce your monthly payments. This can free up cash flow and make it easier to manage your finances. Unexpected Expenses and Opportunities Life throws curveballs. Unexpected medical bills, job loss, or even a fantastic investment opportunity can create a need for immediate cash. A cash-out refinance can provide a financial safety net, allowing you to address these situations without resorting to high-interest options. Beyond Lower Rates: Other Reasons to Refinance While a lower interest rate is often the primary motivation for refinancing, it's important to recognize that it's not the only reason homeowners choose to refinance. Many factors contribute to the decision, and sometimes, a lower rate isn't even the main goal. Switching Loan Types: From ARM to Fixed-Rate Adjustable-rate mortgages (ARMs) can be attractive with their initially lower interest rates. However, as the name suggests, the rate can adjust over time, potentially leading to higher monthly payments. Refinancing from an ARM to a fixed-rate mortgage provides peace of mind by locking in a stable interest rate for the life of the loan. This can be especially appealing in a rising interest rate environment. Shortening Your Loan Term Refinancing to a shorter loan term, such as from a 30-year mortgage to a 15-year mortgage, can save you a significant amount of money in interest over the life of the loan. While your monthly payments will likely be higher, you'll pay off your mortgage much faster and build equity more quickly. This is a great option for homeowners who are financially secure and want to accelerate their path to homeownership. Removing Private Mortgage Insurance (PMI) If you initially put down less than 20% when you purchased your home, you're likely paying private mortgage insurance (PMI). PMI protects the lender in case you default on your loan. However, once you've built up enough equity in your home (typically 20%), you can request to have PMI removed. Refinancing can be a way to get a new appraisal and demonstrate that you've reached the required equity threshold, allowing you to eliminate this extra monthly expense. You can reach out to us through our contact page to learn more about your specific scenario. The Rise of Cash-Out Refinancing: A 2023 Trend As we mentioned earlier, a substantial portion of 2023 refinance volume was cash-out refinancing. This indicates a shift in homeowner priorities. While securing lower interest rates remains important, the need for accessing equity for various financial needs is becoming increasingly prevalent. Economic Factors Influencing Refinance Decisions Several economic factors contribute to the popularity of cash-out refinancing. Rising home values have created more equity for homeowners to tap into. Additionally, inflation and rising costs of living are putting pressure on household budgets, making debt consolidation and access to cash more appealing. Economic uncertainly may lead homeowners to consolidate their debts and protect against future economic shock. Weighing the Pros and Cons: Is Cash-Out Refinancing Right for You? While cash-out refinancing can be a valuable tool, it's crucial to carefully consider the pros and cons before making a decision. On the positive side, it can provide access to cash for important needs, consolidate debt, and potentially lower your overall interest rate. However, it also means taking on a larger mortgage, potentially extending your loan term, and paying closing costs. A recent [Housing Wire article]( "") discussed the importance of working with an expert to determine what option is best for each homeowner. Important Considerations Before You Refinance Assess Your Financial Situation: Carefully evaluate your current debt obligations, income, and expenses. Compare Interest Rates and Fees: Shop around for the best refinance rates and terms. Don't just focus on the interest rate; consider all associated fees. Calculate the Break-Even Point: Determine how long it will take to recoup the closing costs associated with refinancing. Understand the Tax Implications: Consult with a tax advisor to understand any potential tax implications of refinancing. Does Refinancing Make Sense to Consolidate Debt? Let's Talk! Refinancing can be a powerful tool for achieving your financial goals, whether it's consolidating debt, funding home improvements, or simply gaining more financial flexibility. But it's not a one-size-fits-all solution. That's why it's essential to work with a trusted mortgage professional who can assess your individual needs and help you determine if refinancing is the right choice for you. At DDA Mortgage, we're committed to providing personalized guidance and helping you navigate the complexities of the mortgage process. If you're considering refinancing, we encourage you to contact us today for a free consultation. Let us help you explore your options and find the best solution for your unique situation. Check out our Refinancing page to learn more, and then reach out to one of our team members! Disclaimer: This article is for informational purposes only and does not constitute financial advice. Consult with a qualified financial advisor before making any financial decisions. Interest rates and loan terms are subject to change without notice.
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a large share of the refinances in 2025 were indeed driven by homeowners taking cash out of their home equity to consolidate debt or tap housing wealth, not just refinancing to get a lower interest rate. The data available on refinance activity in early and mid-2025 show this clearly: 🏠 1. Cash-Out (Equity Extraction) Was a Big Part of Refinances When mortgage rates stayed relatively high (often above ~6.5%), fewer borrowers could refinance purely to lower their rate or monthly payment. In that environment, lenders and borrowers often shifted toward cash-out refinances — where you borrow more than your existing mortgage and receive the difference in cash. According to Federal Housing Finance Agency (FHFA) data: In early 2025, cash-out refinances made up a majority of refinance activity — rising from about 56 % of refinances to roughly 64 % in the first quarter of the year. That means most refinance borrowers were actually pulling equity out. 💳 2. Cash-Out Often Leads to Debt Consolidation Borrowers commonly use the cash from a cash-out refinance to pay down higher-interest personal debt, like credit cards or auto loans. A Consumer Financial Protection Bureau report (covering broader refinance behavior) found that the most frequent stated reason for cash-out refinancing was to “pay off other bills or debts.” This happens because: Mortgage interest rates on large balances may still be lower than credit card or personal loan interest rates. Consolidating high-interest debt into a mortgage can simplify payments and reduce total interest costs — as long as the homeowner plans correctly and understands the risks of converting unsecured debt into home-secured debt. 📉 3. Rate-Reduction Refinancing Was Less Dominant Compared with past refinance cycles (especially when rates plunged), rate-and-term refinances — where the main goal is lowering your interest rate and monthly payment — were less dominant in 2025. The FHFA reports suggest that because average mortgage rates stayed relatively elevated during the first part of 2025, cash-out refinances became a bigger share — not just refinance for rate savings. 📊 What This Means in Simple Terms Not all refinance activity is about getting a lower rate. A substantial chunk of 2025 refinance volume was cash-out refinancing. Many homeowners took some of that cash to consolidate other debt, meaning part of the high refinance share reflects debt consolidation activity, not solely traditional mortgage refinancing for rate/term improvement. So yes — while refinancing to lower the rate still happened, a lot of the refinance volume in 2025 was linked to cash-out and debt consolidation purposes. This helps explain why refinance activity remained relatively strong even when interest rates weren’t plummeting. Let me know if you want some numbers or examples of how much debt consolidation affected total refinancing! 3 messages remaining. Start a free Business trial to keep the conversation going Try Business free tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329
