Phase One of the Trade deal isn’t expected to deliver a panacea. It, however, augurs well for the economy under pressure as the positive spin to the Trade War, augmented by stable inflation and decent job growth, is likely to keep nerves in check. January is a calm month. Everyone is willing to be in the first gear till the time all the numbers of the last year pour in. The excitement, though, may begin soon as many indicators, otherwise unnoticeable, may have a distinct shine given that this is the election year.
Mortgage Rates: rates decrease all around
This week’s Mortgage Banking Associations’ (MBA) weekly rate survey reveals a decrease across the board.
According to the MBA Weekly Survey: “The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to the lowest level since September 2019, 3.87 percent, from 3.91 percent, with points decreasing to 0.32 from 0.34 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased 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 $510,400) decreased to the lowest level since November 2016, 3.83 percent, from 3.88 percent, with points increasing to 0.24 from 0.17 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.”
“The average contract interest rate for 15-year fixed-rate mortgages decreased to the lowest level since September 2019, 3.30 percent, from 3.35 percent, with points decreasing to 0.27 from 0.29 (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 increased to 3.35 percent from 3.19 percent, with points decreasing to 0.11 from 0.18 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. ”
Mortgage Rate Activity and Predictions
The Bankrate’s weekly survey of mortgage and economic experts, countrywide, reveals that over the coming week, most of the experts are expecting no change in rates (16th January to 22nd January).
Out of those surveyed, 20% of the experts feel we are headed for a rate hike and 20% sense a decline is on the cards. 60% of the experts feel rates will remain unchanged (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- 10th January to 16th January- have shot up by 0.01% for 30 Y Fixed and 0.02% for 15 Y Fixed.
Freddie Mac’s weekly mortgage survey noted, “Mortgage rates inched up by one basis point this week with the 30-year fixed-rate mortgage averaging 3.65 percent. By all accounts, mortgage rates remain low and, along with a strong job market, are fueling the consumer-driven economy by boosting purchasing power, which will certainly support housing market activity in the coming months. While the outlook for the housing market is positive, worsening homeowner and rental affordability due to the lack of housing supply continue to be hurdles, and they are spreading to many interior markets that have traditionally been affordable.”
Mortgage Rate Lock Advice
I would recommend you to Lock if you are closing within the next week and Float if you are closing any time beyond that.