Mortgage Rate Recap and Outlook for the Week Ending December 20, 2019
Author bio section
I am the author of this blog and also a top-producing Loan Officer and CEO of InstaMortgage Inc, the fastest-growing mortgage company in America. All the advice is based on my experience of helping thousands of homebuyers and homeowners. We are a mortgage company and will help you with all your mortgage needs. Unlike lead generation websites, we do not sell your information to multiple lenders or third-party companies.
Home builders are looking more confident and housing starts have shot up in November. This is good tidings for aspiring buyers. All 2019, we have fought against low inventory but with some luck, the supply deficit may turn a corner in 2020. Purchase applications usually come down at this time of the year but it is still a clean 10% above on the year-over-year stat.
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 3.98 percent, with points remaining unchanged at 0.33 (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 3.96 percent from 3.90 percent, with points decreasing to 0.26 from 0.27 (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 increased to 3.40 percent from 3.37 percent, with points decreasing to 0.26 from 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.”
“The average contract interest rate for 5/1 ARMs decreased to 3.28 percent from 3.52 percent, with points decreasing to 0.23 from 0.24 (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 not a single expert believes rates are going to fall over the coming week (18th December to 25th December).
Out of those surveyed, 69% of experts feel we are headed for a rate hike and 31% sense a decline is on the cards (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- 11th December to 18th December- have remained unchanged for both 30 Y Fixed and 15 Y Fixed.
Freddie Mac’s weekly mortgage survey noted, “The economy continued to pick up momentum with a solid increase in residential construction, improvement in industrial output in our nation’s factories and a rise in job openings. While the economy is in a sweet spot, improvements in housing market sales volumes will be modest heading into next year simply due to the lack of available inventory. The demand is clearly not being met for entry-level Millennials and trade-up Generation X home buyers. If there was more inventory of unsold homes for buyers to choose from, home sales would be rising at a faster rate.”
Mortgage Rate Lock Advice
I would recommend you to Lock if you are closing within the next 3 weeks and Float if you are closing any time beyond that.
Related Posts
- 99The speed of residential construction has shot up over the past few months and is well in line to reach its best figures in over a decade. For a market that has been short on inventory for some time now, this is great news, especially with the spring season already…
- 97A nation’s economy is affected by even the faintest geopolitical unrest but the fact that Trump has addressed any concerns regarding the Iranian fallout stabilizes our perception of the economy. So rates are not going on a tailspin, rest assured! The employment report for the private sector in particular may…
- 96The mortgage market had reacted favorably to the Coronavirus threat. Now that the trend is reversing, we may see a partial correction in the mortgage market. It is nothing new. Global threats that loom suddenly bring about economic movements with it and just as soon as the threats disappear, the…
- 96Consumer sentiment may rally from here based on multiple positive indices, near all-time-low rates, and the general good feeling that a new year brings. House constructions as well as number of homes sold are expected to pick up. While Americans are aware that the expansionary phase can't last eternally, they…
- 96Purchase volume should be positively affected by higher house inventory in 2020. Inventory which has been a concern for some time now is expected to be tackled by construction initiatives that are on the way now. One point of note is the question of housing affordability which may become a…
