Consumer 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 are no more wary of the recession pundits and this is no small news.

Mortgage Rates: rates decrease all around

This week’s Mortgage Banking Associations’ (MBA) weekly rate survey reveals a decrease across the board with the exception of 30-year Fixed jumbo balances.

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) remained unchanged at 3.87 percent, with points decreasing to 0.27 from 0.32 (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) increased to 3.87 percent from 3.83 percent, with points decreasing to 0.21 from 0.24 (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 the lowest level since November 2016, 3.25 percent, from 3.30 percent, with points decreasing to 0.22 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 3.29 percent from 3.35 percent, with points increasing to 0.25 from 0.11 (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 over the coming week (23th January to 29th January), most of the experts are expecting no change in rates.

Out of those surveyed, 31% sense that rates will come down while 69% of the experts feel rates will remain unchanged (with a maximum movement of two basis points either side). It is notable that there are no takers for a rate hike.

My prediction is that rates will remain unchanged this week, as quoted in the Bankrate report, “Mortgage Rates will remain the same. The next few days are very light on any major economic news that can have a significant impact on mortgage bonds yield. The market might be a little concerned about the spread of coronavirus in China and the impeachment hearings in the Senate, but so far the bond has moved sideways. The trend should continue this week and the mortgage rates could remain unchanged.”

Freddie Mac’s weekly mortgage survey has reported that the conforming rates for the week- 16th January to 23rd January- have come done by 0.05% for both 30 Y Fixed and 15 Y Fixed.

Freddie Mac’s weekly mortgage survey noted, “Rates fell to the lowest level in three months and are about a quarter point above all-time lows. The very low rate environment has clearly had an impact on the housing market as both new construction and home sales have surged in response to the decline in rates, the rebound in the economy and improving financial market sentiment.”

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 it.