At the time of writing this piece, we await the University of Michigan’s Consumer Sentiment Index. It is expected to rally close to 96. Mortgage shoppers will have their eyes glued to it.

It is worth noting that the higher the number, the more optimistic the consumers are and hence more likely to make purchases in the near future, the situation clearly affecting the mortgage rate. Mortgage shoppers will hope for their greater good that the index doesn’t rise past October’s 95.5

MortgageRates: rates decrease across the board

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 3.98 percent from 4.05 percent, with points remaining unchanged at 0.37 (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 3.97 percent from 4.01 percent, with points decreasing to 0.24 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 3.38 percent from 3.40 percent, with points decreasing to 0.31 from 0.36 (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 remained unchanged at 3.43 percent, with points decreasing to 0.21 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 a tie between those who feel rates will rise and those experts who think they will remain unchanged for the coming week (7th November to 13th November).

Out of those surveyed, 44% predict a rate hike while 11% foresee a decline in rates. The remaining 44% believe 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- 31st October to 6th November-  have come down, the downtick being  0.06% for 15 Y fixed and 0.09% for 30Y fixed.

Freddie Mac’s weekly mortgage survey noted, “After a year-long slide, mortgage rates hit a cycle low in September 2019 and have risen in six out of the last nine weeks due to modestly better economic data and trade-related optimism. The improvement in sentiment has been one of the main drivers behind the surge in equity prices and will provide a halo effect to consumer spending heading into the important holiday shopping season. ”

Mortgage Rate Lock Advice

I would say, lock if you are closing anywhere within the next three weeks and certainly so if you are doing it in a week’s time. Float if you are closing between 21 and 60 days from now.