What lies ahead for Mortgage Rates for San Jose Refinance and Home Purchase? And the dangers of following Media when it comes to Mortgage Rates for your Home Loan.
Last week on 10/14 after Freddie Mac released its weekly survey of Fixed and ARM mortgage rates, media was abuzz with the news that interest rates have fallen to a level not seen since 1951. The very next day however, Mortgage Bonds went down 43 basis points causing the rates to worsen multiple times in a single day.
That’s the risk of following the media when it comes to Mortgage rates. Media made everyone believe that the rates went down again last week, while in reality, the bond market had a bad week after the 10 yr note dropped 40 basis points since 9/21 when the FOMC said it was “prepared” to add more stimulus, the 10 yr note rate increased 16 basis points, back to 2.57%. While media looks at FreddieMac and BankRate weekly surveys, mortgage rates actually change almost every day, sometimes even multiple times a day as seen last Friday. Sometimes, by the time those surveys are out, the interest rates have already taken a turn in the other direction.
Next week, over the top of the data points is the coming Fed easing (possible buying of Treasuries, Mortgage bonds or both). There is very little doubt now that the Fed will announce the details on Nov 3rd at the conclusion of the FOMC meeting. The doubt rests with the details; how much, when, and what will the Fed buy to try to improve the economy. Likely treasuries but how much and at what speed. Looks like the bond market is going to settle into a trading range that won’t test the recent low rates, nor spike back to pre 9/21. The equity markets are also likely to be choppy; that market also has had a huge run-up and due to settle over the next two weeks.
While the long-term outlook for rates continue to be “low”, look for mortgage rates to edge fractionally higher next week. If you are floating, look for improvements on any given day and consider locking.
I track the mortgage bonds live so that I can advise my clients when is the best time to lock the rate. If you would like live updates of the bond market, follow me on Twitter. And if you are shopping for best mortgage rates for a San Jose (or rest of California) Refinance or Home Purchase, complete the rate quote request form on the sidebar so that we can shop 100+ lenders for you.