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Piggybacking on low mortgage rates, the refinance applications are on a rise. Refinance volume has pushed total mortgage volume up and it is nearly 150% above where it was, this week last year. The data, however, is not as reliable given that Thanksgiving fell a week earlier last year. To add, 30-Y fixed has come down by 1.15% over this one year period, boosting the present mortgage volume, and hence further skewing the Year-over-Year data. Be that as it may, there is certainly a cause for cheer.
Mortgage Rates: rates decrease across the platform
This week’s Mortgage Banking Associations’ (MBA) weekly rate survey reveals a decrease in mortgage rate 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 3.97 percent from 3.99 percent, with points decreasing to 0.30 from 0.33 (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 3.87 percent from 3.93 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 15-year fixed-rate mortgages decreased to 3.38 percent from 3.40 percent, with points decreasing to 0.27 from 0.31 (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 3.42 percent from 3.51 percent, with points decreasing to 0.22 from 0.23 (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 there are no takers for a rate hike for the coming week (27th November to 4th December).
Out of those surveyed, 33% experts feel we are headed for a rate decline and 67% 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- 21st November to 27th November- have shot up by 0.02% for 30 Y Fixed and has remained unchanged for 15 Y Fixed.
Freddie Mac’s weekly mortgage survey noted, “Following a decline in the first nine months of 2019, mortgage rates have traded narrower during the last two months with a modest drift upward due to an improved economic outlook. While there has been a lag in the housing market’s response to lower rates, real estate volumes have clearly shifted into a higher gear. Moreover, the recent improvement in the cyclical segments of the economy and easing financial conditions will provide a gentle tailwind to the real estate market rebound over the next few months.”
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.