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A 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 push the rates up and even the lenders can keep them high (artificially) in order to reduce the application stress.
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 ($484,350 or less) decreased to 3.91 percent from 3.95 percent, with points increasing to 0.34 from 0.31 (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 $484,350) decreased to 3.88 percent from 3.92 percent, with points decreasing to 0.17 from 0.30 (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 3.35 percent from 3.37 percent, with points increasing to 0.29 from 0.28 (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 3.19 percent from 3.27 percent, with points decreasing to 0.18 from 0.37 (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, experts are evenly drawn on which way the rates can move (8th January to 15th January).
Out of those surveyed, 46% of experts feel we are headed for a rate hike and 39% sense a decline is on the cards. 15% 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- 2nd January to 9th January- have shot up by 0.02% for 30 Y Fixed and 0.03% for 15 Y Fixed.
Freddie Mac’s weekly mortgage survey noted, “The combination of improved economic data and market sentiment has led to stability in mortgage rates, which have hovered around 3.7 percent for nearly the last two months. The stability is welcome news after the interest rate turbulence of the last year, which caused a slowdown in the housing market and other interest rate sensitive sectors. The low mortgage rate environment combined with the red-hot labor market is setting the stage for a continued rise in home sales and home prices.”
Mortgage Rate Lock Advice
I would recommend you to Lock if you are closing within the next month and Float if you are closing any time beyond that.