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Mortgage Rates Staying Very Flat and Very Low

Mortgage Rates - Mon, 2020-07-06 21:14
Mortgage rates barely budged for the third straight day, which is welcome news considering they are at all-time lows. The stability comes in spite of at least two important economic reports that would normally push rates unequivocally higher according to past precedent. These include Thursday's big jobs report and a key barometer of the services sector released this morning. Both pieces of data suggested an economic recovery is well underway. Even though there is certainly a lot more ground to cover before anyone would consider the economy to be "mostly restored' to pre-COVID levels, financial markets are usually willing to reward progress toward such goals. While one might be able to make the case that the stock market is doing just that, the bond market (which dictates interest rates) isn

Huge Housing Rebound, All-Time Low Rates, But At What Cost?

Mortgage Rates - Thu, 2020-07-02 20:29
This week's economic data included the biggest-ever gain in Pending Home Sales, a leading indicator for the housing market. Meanwhile, mortgage rates pushed down to new all-time lows yet again. But at what cost? The most pessimistic way to explain the surge in home sales is to say it was only made possible by the record-setting declines in the past few months. That's mostly true, but it fails to give credit to what the industry and government officials have been doing to help jump start economic activity. Would sales bounce back like this without all-time low mortgage rates and a stock market recovery (both made possible by emergency intervention from the Federal Reserve)? Would consumers be as comfortable spending money without the promise of additional fiscal stimulus and other support programs

Rates at All-Time Lows Ahead of Important Jobs Data

Mortgage Rates - Wed, 2020-07-01 22:04
Mortgage rates were generally unchanged today, thus leaving the average lender at all-time lows for conventional 30yr fixed scenarios. It continues to be the case that loan scenarios with additional risk factors have NOT seen nearly as much improvement as those in the top tier. In general, however, things are starting to improve. When coronavirus rocked the financial markets in March, mortgage rates were particularly hard hit. This had a lot to do with the anticipated inability of millions of homeowners to make their mortgage payments. While the government and the mortgage industry rushed to put programs in place to help those homeowners, there were/are unavoidable consequences for mortgages in the eyes of investors. Simply put, each additional risk factor that makes forbearance (a temporary

Best Month Ever For Mortgage Rates

Mortgage Rates - Tue, 2020-06-30 22:14
Mortgage rates managed another slight improvement today, which means the average lender is offering new all-time low rates for the 4th time this month. Even if rates had lurched unexpectedly higher today, June still would have gone down as the best month in the history of the mortgage market with many lenders now offering conventional 30yr fixed rates under 3% on top tier scenarios. The low rate environment has been made possible first and foremost by the economic contraction resulting from coronavirus. In and of itself, however, that still likely wouldn't be sufficient to get rates as low as they are. The rest of the heavy lifting has been done by the Federal Reserve, which stepped in when markets were experiencing the height of their recent volatility in early March 2020. The Fed helped restore

Mortgage Rates Continue at All-Time Lows, But Caveats Remain

Mortgage Rates - Mon, 2020-06-29 22:00
Mortgage rates were unchanged to slightly lower today, bringing the average lender right in line with all-time lows . Averages aside, several lenders are slightly higher than they were on Friday. Either way, the movement was minimal over the weekend. Beyond that, no conversation about all-time low rates would be complete without several of these recently relevant caveats: 1. Different borrowers will see different pricing. This sort of goes without saying, but it's much more pronounced than it has been before coronavirus. Specifically, we're talking about the big differences in mortgage rate quotes for borrowers with certain combinations of risk factors. These include things like investment properties, cash-out, higher loan-to-value ratios, and the like. The all-time low rates seen in 2012

Mortgage Rates Are Headed Higher (Eventually)

Mortgage Rates - Fri, 2020-06-26 21:47
The fates of the economy, the housing market, and interest rates remain closely intertwined with coronavirus. The pandemic is clearly responsible for the record-setting drop in economic activity (including the housing market). And it has clearly been the key source of motivation for both stocks and interest rates (which we can follow most objectively via 10yr Treasury yields). A shorter-term chart shows how closely they've been following one another as they digest coronavirus updates. As the initial panic of March and early April subsided, and people began returning to work, it was perfectly reasonable to expect markets and the economy to begin bouncing back (i.e. higher stocks and bond yields). That is arguably what happened in April and May. We've even seen several areas of the economy experience

Mortgage Rates Reflecting Market Concerns

Mortgage Rates - Thu, 2020-06-25 21:32
Mortgage rates moved modestly lower today, bringing the average lender very close to all-time lows . The caveat continues to be that day-to-day rate changes have been small ever since hitting the confirmed all-time lows on June 11th. Realistically, if you locked in a rate any time in the past 4 weeks, you did very well. The same is true today, and it will continue to be true as long as the broader financial market remains concerned about the resurgence in covid-19 cases in several states. Mortgage rates are primarily driven by the bond market. They share many similarities with US Treasuries. When investors are feeling cautious or seeking to prevent the loss of capital, the bond market offers a safe haven. When demand for bonds increases, bond prices rise and bond yields fall. "Yield" is another

Record Low Rates For Some; Frustration and Confusion For Others

Mortgage Rates - Wed, 2020-06-24 21:10
Mortgage rates moved modestly lower today, but face an uphill battle in general. They fell very quickly as coronavirus first hit financial markets. They hit multiple new all-time lows in since March 9th and continued setting new records as recently as last week for some lenders. In fact, there are a few lenders that are offering their best rates ever TODAY. The catch is that these rates are very similar to those seen yesterday and the day before (and so on and so on). Markets are waiting to see if we can prevent a massive 2nd wave of coronavirus cases while still reopening the economy. To whatever extent that's possible, rates should begin to see gradual upward pressure. There's another important catch , and it's one we've talked about quite a bit in the past few months. At the very same lenders

Mortgage Rates Mostly Steady And Still Very Low

Mortgage Rates - Tue, 2020-06-23 21:43
It seems almost melodramatic to refer to any modest increase in mortgage rates these days. If we were to go over each lender's rate sheet with a fine tooth comb today, indeed we'd likely find the average is just microscopically higher. But higher from WHERE? With the very best scenarios seeing 30yr fixed rate quotes of 3.0% or below, it's hard to spend too much time lamenting any modest day-over-day increases. Beyond that, most of the recent movement has been very small- -too small to measure in terms of changes in the actual interest rate you'd be quoted. Instead, there could simply be a minor adjustment in the upfront costs (origination, discount, or lender credit toward closing costs, depending on the scenario). All that to say times are good for mortgage rates , and when momentum pushes

Mortgage Rates Hold Ground Near Lows. Can it Continue?

Mortgage Rates - Mon, 2020-06-22 20:59
Mortgage rates held their ground today, with the average lender in roughly the same shape as they were on Friday. Incidentally, that's great shape! When it comes to the best-case scenario conventional 30yr fixed quote, rates are still very close to the all-time lows seen two weeks ago. Scenarios with additional risk factors (jumbo balances, lower credit, lower equity or investment properties), the landscape is far more varied. For those scenarios, rates are much farther away from all-time lows. Will rates be able to remain at these levels or perhaps even set new all-time lows? More and more, this depends entirely on the course of a potential "2nd wave" of coronavirus impacts. This seems to be far more of an issue for some states than others right now. If we see resurgences in states that had

The Great Debate For Rates, Housing, And The Market

Mortgage Rates - Fri, 2020-06-19 21:41
Coronavirus hit markets with unprecedented force in March. Stock prices and bond yields sank. When the outlook grew less dire, markets began moving back in the other direction. As quarantine measures ease, fear surrounding a second wave of COVID-19 is pushing back on the recovery in markets. Let's quantify the fear using daily COVID-19 case counts in several key states. There's no question that these trends are alarming at face value, but the implications can vary quite a bit due to increased testing. We can get a clearer sense of the risks by looking at hospitalization data. For example, the seemingly dire situation in California looks quite different based on LA County hospitalizations. Numbers remain elevated, but they're not rising nearly as fast as case counts. In Texas and Arizona, however

Investor Caution Helping Push Rates Back Toward Lows

Mortgage Rates - Thu, 2020-06-18 21:06
Mortgage rates improved modestly today as investors remain cautious amidst rising coronavirus stats in several states. The experience of those states is fueling broader concern about a 2nd wave of the disease that may logically follow less efficient social distancing as various states and counties reopen for business. In general, when investors are feeling cautious or fearful (relatively), we tend to see things like the bond market do better while stocks do worse . That's not a hard and fast rule, but it' a fair generalization. This notion is supported in the current environment by the fact that stock prices and bond yields have been an almost perfect mirror image of each other recently. Bond prices move inversely with rates/yields. In other words, higher bond prices lead to lower interest

Mortgage Rates Mostly Steady as Markets Wait For Info

Mortgage Rates - Wed, 2020-06-17 21:50
Mortgage rates joined many other sections of financial markets today in doing almost absolutely nothing . Both stocks and bonds were almost perfectly flat. Neither was overly interested in responding to economic data or Round 2 of Fed Chair Powell's congressional testimony. That's not too surprising considering today's economic data wasn't hotly anticipated and Powell would have been hard-pressed to say something we haven't already heard him say several times (he was in the hot seat yesterday as well as last week after the Fed Announcement). Beyond that, financial markets know the Fed is committed to keeping rates low for quite a while. Although they don't control mortgage rates, their bond buying programs definitely help rates remain much lower than they otherwise would be. All that to say

Mortgage Rates Edging Higher So Far This Week

Mortgage Rates - Tue, 2020-06-16 21:39
Mortgage rates moved higher for the 3rd straight business day. That said, last Friday is better described as being a "2nd consecutive day of all-time lows." Even yesterday, the average lender was able to quote rates under 3% for top tier conventional 30yr fixed scenarios. Today's upward pressure was a bit more noticeable as markets cheered a Retail Sales report that was much stronger than expected. In general, stronger data is good for stocks and bad for bonds (and when bonds are weaker, rates move higher). There's a particular concern to be aware of in the world of mortgage rates--especially for those who are counting on additional improvements. Simply put, the underlying bond market hasn't really been making a case for additional improvement. If anything, the case is for gradually higher

Just When You Thought We Were Done Talking About All-Time Lows

Mortgage Rates - Fri, 2020-06-12 22:00
Mortgage rates plunged well into new all-time lows this week, which is a striking turn of events given the vastly different outlook at the end of last week. Specifically, a series of strong economic reports led to significant losses in the bond market (bond losses = higher rates) and gains in stocks. The unspoken warning was that rates had been too complacent in the face of a potential economic rebound. Now this week, markets are singing a different tune . Recently strong economic data was great to see, but with coronavirus numbers spiking in several states, the sustainability of the economic improvement is in question. Sentiment shifted on both sides of the market with stocks giving signals that their recent gains may have been a bit too euphoric . The result was the biggest sell-off since

Mortgage Rates Below 3% For 1st Time Ever (But Not For Everyone)

Mortgage Rates - Thu, 2020-06-11 22:28
Mortgage rates plunged well into new all-time lows today. This is a striking turn of events given the vastly different outlook at the end of last week. Specifically, a series of strong economic reports led to significant losses in the bond market (which implies higher rates) and gains in stocks. The unspoken warning was that rates had been too complacent in the face of a potential economic rebound. Now this week, markets are singing a different tune. Recently strong economic data was all well and good, but with covid-19 numbers spiking in several states, the sustainability of the economic improvement is in question. That sentiment shifted at the same time that the stock market gave signals that it had improved about as aggressively as it was going to improve for now. The result was the biggest

Mortgage Rates Surge Lower After Fed Announcement

Mortgage Rates - Wed, 2020-06-10 21:25
Mortgage rates dropped quickly today. This wasn't necessarily destined to be the case this morning, but after the Fed released its most recent policy announcement, mortgage-backed bonds improved significantly, thus allowing lenders to offer lower mortgage rates via mid-day price changes. Bonds loved what the Fed had to say because the announcement unequivocally committed to ongoing bond purchases in amounts equal to what we've seen in recent weeks. In a nutshell, the Fed will continue to be the single biggest buyer of new mortgage debt. When demand for that debt is strong, mortgage bond prices move higher. When prices move higher, rates move lower. Today's mortgage rate move is NOT related to the Fed forecasting near-zero rates through 2022. Those forecasts pertain to the Fed Funds Rate which

Mortgage Rates Are Quickly Shaking Off Last Week's Panic

Mortgage Rates - Tue, 2020-06-09 22:19
Mortgage rates moved lower again today, with the average lender erasing a good amount of the weakness seen last week. That's good news considering rates hit all-time lows on the afternoon of June 1st (last Monday). After that, however, rates rose at their fastest pace in several months, raising some concern that the bond market (which underlies rates) was shifting gears in response to stronger-than-expected economic data. It remains to be seen whether these past 2 days constitute a reversal in a negative trend or if they're merely a token correction to last week's rate spike. In other words, are things good or are they just noticeably less bad than they were? We won't be able to answer this until we see how things play out in the coming days. Tomorrow's Fed announcement is the biggest potential

Mortgage Rates Starting Strong This Week

Mortgage Rates - Mon, 2020-06-08 22:50
After moving higher at a fairly quick pace last by last Friday, mortgage rates are off to a better start this week. Rates remain noticeably higher versus the best recent levels, seen on June 1st and 2nd, but the average lender offered slightly lower rates this morning and then ended up offering a mid-day price improvement as well. There's no way to know ahead of time if a lender will change rates in the middle of the day, but if the underlying bond market moves enough, it can happen any time. Most of the time, these moves are small enough that they only impact the upfront cost side of the mortgage rate equation. In other words, your APR might change, but the " note rate " usually won't. It could be risky to take today's strong performance as a sign that rates are out of the woods. While they

Are All-Time Low Rates Behind Us Now?

Mortgage Rates - Fri, 2020-06-05 21:05
Things are quickly getting interesting for mortgage rates , and by 'interesting,' I mean potentially alarming. Everything's relative though, so it should be said right up front that the average mortgage rate is still only a hop and a skip from the all-time lows seen last week. But the recent past and present are old news when it comes to discussing rates and financial markets, right?! We want to know what the future holds! Up until this week, there was a fairly even balance of opinion among analysts, economists, and mortgage market stakeholders. It was and still is perfectly valid to believe rates have an equal chance of pecking away at new all-time lows versus embarking on a journey back toward much higher levels. That said, those who saw equal chances of higher vs lower rates are being forced

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