Mortgage Rates Lowest in Nearly a Month

Mortgage Rates had another decent day on Thursday with the average lender offering modestly better terms compared to yesterday. Improvements continue to arrive in fairly small doses, but they’ve been adding up . You’d have to go back nearly a month to March 12th to see anything definitively lower (although it’s worth noting that today’s rates are also roughly in line with those seen on March 25th). As far as specific levels, lenders remain widely stratified with purchases being quoted in a range of 3.00-3.125% and refinances in a range of 3.125-3.375 (conventional, 30yr fixed). Today’s specific events and economic data releases did little to motivate the gains seen in rates, although a report showing higher-than-expected Initial Jobless Claims technically agrees with the move. There were also
Mortgage Rates Lowest in Nearly a Month
Mortgage Rates Lowest in Nearly a Month

Rates Under Pressure Despite Weak Jobs Report

Economic data is traditionally one of the key contributors to interest rate movement. Of the regularly-scheduled reports, none has more market-moving street cred than The Employment Situation–otherwise known as “the jobs report” or simply NFP (due to its headline component: Non-Farm Payrolls). The relationship between econ data and rates can wax and wane. Covid definitely threw a wrench in the works, and economists still don’t know exactly how things will shake out. In general, the market is trading on the assumption that things continue to improve even if the data isn’t making that case today. In fact, today’s jobs report specifically suggests something quite different . The economy only created 49k new jobs in January, and the last few reports were revised much lower to boot. Taken together
Rates Under Pressure Despite Weak Jobs Report
Rates Under Pressure Despite Weak Jobs Report

Mortgage Rates Start Strong But End Higher

Mortgage rates have had a great couple of weeks after jumping to multi-month highs at the beginning of January. By yesterday, they’d made it almost all the way back to their best recent levels. The same was true this morning, but things have changed since then. The bond market (which dictates rates) had its worst day in several weeks. This was at least partially in response to volatility in equities markets which helped bonds yesterday but hurt them today. When bonds lose enough ground during the course of a day, mortgage lenders can adjust their rate offerings with what’s known as a “mid-day reprice.” Reprices can be for the better or worse. Today’s were worse , but the damage is far from severe –only unwinding a day or two of the recent improvement. The average mortgage borrower would likely
Mortgage Rates Start Strong But End Higher
Mortgage Rates Start Strong But End Higher

Mortgage Rates Mostly Recover After Starting The Day Higher

Mortgage rates were mixed to slightly higher today, depending on the lender. “Higher” is a relative term, in this case as the average loan seeker is unlikely to see much of a difference between yesterday’s quotes and today’s. Even then, the changes would almost certainly be in the form of upfront costs (or lender credits) rather than to the interest rate itself. For the sake of thoroughness and accuracy, keep in mind there are really two different kinds of rate when it comes to mortgages. The ” note rate ” is unsurprisingly the rate found at the top of your mortgage note. This is the rate that’s applied to the principal balance of your loan in order to determine your principal and interest payment. The other rate would be the APR (annual percentage rate), which factors in all of the upfront
Mortgage Rates Mostly Recover After Starting The Day Higher
Mortgage Rates Mostly Recover After Starting The Day Higher

How Long Can The Good Times Last For Housing and Rates?

While it wasn’t quite the biggest surprise of 2020, the strength of the housing market was one of the best. The just-released numbers for December keep the good times rolling. Leading the charge was December’s Existing Home Sales report from the National Association of Realtors (NAR). The annual pace wasn’t quite at the recent 15-year high seen 2 months ago, but it hasn’t really fallen since then. No complaints. If you want to see more 15-year records broken, you’ll have to rely on The Census Bureau’s New Residential Construction numbers. While not a direct measure of New Home Sales, the correlation is high (we’ll get the official sales numbers next Thursday). For now, we can bask in the warm glow of another long-term high in Housing Starts. With sales and construction numbers like this, it
How Long Can The Good Times Last For Housing and Rates?
How Long Can The Good Times Last For Housing and Rates?

Biggest Housing Boom Since 2006 And The Truth About "All Time Low" Rates

The National Association of Realtors’ Existing Home Sales report is the broadest measure of housing market activity. It just hit a 14-year record for the 3rd month in a row. It’s not just existing homes. The new home market is crushing it as well. This week’s data on Housing Starts (the ground-breaking phase of new construction) showed another solid step back toward the boomy levels of late 2019. Builders may not be breaking ground as fast as they were a year ago (before covid), but that has everything to do with covid and nothing to do with demand. This week’s record result for builder confidence reflects that. To top it all off, this week brought another round of news articles proclaiming “all-time low” mortgage rates. But are they really? For some borrowers in some scenarios, yes. But in
Biggest Housing Boom Since 2006 And The Truth About "All Time Low" Rates
Biggest Housing Boom Since 2006 And The Truth About "All Time Low" Rates

Low Rates Forever? Not Exactly, But The Word 'Indefinitely' Sounds Better All The Time

Mortgage rates were mixed today, depending on the lender. The underlying bond market (which dictates day to day changes in rates) has been more volatile in the past 48 hours compared to the past 4 weeks. Mortgage lenders respond to this volatility in different ways. It’s those differences that account for higher rates for some lenders and lower rates for others. But those differences are only in day-over-day terms. In other words, one lender might be higher in rate compared to yesterday only because they didn’t respond to yesterday’s market volatility in a timely way. Specifically, lenders have a choice as to whether or not they will adjust their mortgage rate offerings based on market conditions. Some are jumpier than others. Quite a few lenders increased rates in the middle of the day (yesterday
Low Rates Forever? Not Exactly, But The Word 'Indefinitely' Sounds Better All The Time
Low Rates Forever? Not Exactly, But The Word 'Indefinitely' Sounds Better All The Time

Mortgage Rates Vary Widely–Nothing To Do With The Fed

Yesterday’s policy announcement from the Federal Reserve had a chance to cause significant volatility for the bond market and the bond market is the chief ingredient in the mortgage rate equation. But this time around, the Fed didn’t cause a measurable reaction in the mortgage market. I’m frequently asked whether mortgage rates are 0% since the Fed just kept rates at 0%. People hear a headline on the news or a radio soundbyte mentioning the words “Fed, rate, zero,” and then assume the Fed just made some change that dropped rates to zero percent. After all why would there be so many news headlines about it if the Fed merely kept its policy rate unchanged?! It’s a fair question in that sense, but understand that the Fed’s rate decision will always make the news, even if the rate is the same as
Mortgage Rates Vary Widely–Nothing To Do With The Fed
Mortgage Rates Vary Widely–Nothing To Do With The Fed

Mortgage Rates Still Battling Hangover From Last Week's Drama

Mortgage rates are still coping with the after-effects of last week’s surprise implementation of a new fee on refinances. The fee in question is technically an LLPA (Loan-Leve-Price-Adjustment). LLPAs are a normal part of the mortgage pricing process and they help lenders account for different risk factors (credit score, equity, occupancy, etc.). The new refi LLPA is a bit different in that it’s in a sub-category known as an “adverse market fee.” This is the agencies’ way of collecting extra money to compensate for extra risks–hopefully transitory ones. None of the above would have been a big deal for the mortgage industry had the new fee been rolled out like every other fee: with plenty of advanced notice and in logical, palatable amount. As it stands, it more than doubled the average fee
Mortgage Rates Still Battling Hangover From Last Week's Drama
Mortgage Rates Still Battling Hangover From Last Week's Drama

Most Mortgage Rate Headlines Are Wrong Today

There are quite a few more new stories than normal about mortgage rates today. Most of them are wrong. This one is not, and it’s pretty easy to see why. Freddie Mac releases its weekly mortgage rate survey every Thursday morning. The survey accepts responses from Monday through Wednesday, but based on a comparison of day-to-day rates versus the survey numbers, it would appear Monday’s rates get most of the weight, Tuesday’s slightly less, and Wednesday’s almost none. In other words, the survey has historically compared Mon/Tue rates to Mon/Tue rates. That’s not a problem if that was made more clear by the throng of journalists that cite the survey as the definitive word in week-over-week rate movement. As it stands, however, we have headlines unequivocally proclaiming mortgage rates are at
Most Mortgage Rate Headlines Are Wrong Today
Most Mortgage Rate Headlines Are Wrong Today