Fresh US-imposed tariffs will come into effect in China on 15th December. Both the economies may lock a small part of the deal before this date. As witnessed of late, bond markets are more reactive to the Trade War than any domestic news. If such a deal comes through, expectations around the reduction of tariffs will set the scene for negativity in the bond market. The mortgage market, then, can only be expected to be reactive.

Mortgage Rates: rates offer a mixed bag

This week’s Mortgage Banking Associations’ (MBA) weekly rate survey reveals a mixed performance across the board.

According to the MBA Weekly Survey: “ The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) remained unchanged at 3.97 percent, with points increasing to 0.32 from 0.30 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week. ”

1 point in cost = 1% of the loan amount

“ The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater
than $484,350) increased to 3.91 percent from 3.87 percent, with points decreasing to 0.26 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.”

“ The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.37 percent from 3.38 percent, with points increasing to 0.28 from 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.” 

“ The average contract interest rate for 5/1 ARMs decreased to 3.28 percent from 3.42 percent, with points increasing to 0.27 from 0.22 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.”

Mortgage Rate Activity and Predictions

The Bankrate’s weekly survey of mortgage and economic experts, countrywide, reveals that most experts believe rates will remain unchanged for the coming week (4th December to 11th December).

Out of those surveyed, 20% experts feel we are headed for a rate hike, another 20% sense a decline and 60% feel there will be no change (with a maximum movement of two basis points either side).

Freddie Mac’s weekly mortgage survey has reported that the conforming rates for the week- 28th November to 4th December- have come down by 0.01% for 15 Y Fixed and has remained unchanged for 30 Y Fixed.

Freddie Mac’s weekly mortgage survey noted, “ This week the economy sent mixed signals, leaving mortgage rates unchanged. Survey data for manufacturing and service industries varied while construction spending fell modestly. However, homebuyer demand continued to improve, rising eight percent. Clearly homebuyers remain bullish on the real estate market.”

Mortgage Rate Lock Advice

I would recommend you to Lock if you are closing within the next 7 days and Float if you are closing any time beyond.