Welcome back. It’s Josh Lewis, Certified Mortgage Consultant with BuyWise Mortgage with your weekly mortgage market update where we take a look at what’s impacting interest rates in the mortgage market and give you insights into whether you should lock or float your interest rate if you’re currently in the market.
So really still in this sideways trend but on Friday, we got some important movements over … actually over Thursday and Friday. You can see we were right above, this is an important level of support. It’s a 61.8% Fibonacci support level, and we had been above it.
As long as we held above it, we thought we had a pretty good chance maybe to run up to this 50% retracement, which was about another quarter percent better.
Well, on Thursday, we fell below it and then got a confirmation on Friday. The good news is we have the 25-day moving average has been moving up here, also a layer of support. It gave way on Friday, but we’ll need to see what happens tomorrow.
Today’s Martin Luther King Day. We are closed. The markets are closed so no market activity, but if this gives away, we’re probably going to at least make a run down here to the 200-day moving average. That 200-day moving average should be a pretty strong layer of support, so just to put that into context, we’re right here at 101.68.
That’s down at 101.34, so it’s about three-eighths of a point in fee, a little less than one-eighth of a percent in interest rate if we ran all the way down there.
I did want to just quickly take a look at where we are historically over, say the last year or so. If you’ve been looking at the market for the last year, that 50% retracement level that we were hoping to make a run to has been pretty strong resistance for over a year, made a run at it, got turned down, and then that 61.8, it’s been pretty strong resistance for the better part of the last year.
We had, for a period of time, moved well below it. This was our worst levels of interest rates in November when we started this long run.
If you’ve been watching these reports for the last few weeks, you know what my thoughts are, that any time we have a long run like this, we’re likely to give some of it back before we start another move either up higher in bond prices to better rates or lower in bond prices and worse rates.
We’re still above layers of support, but we have some pretty stiff resistance here likely that we’ve seen the best of the rates for the near term until we get some more information that would lead to negative thoughts on the economy, either furthering of the trade issues with China, slowing in the economy that would lead to lower interest rates as a recession takes hold and causes some deflation to take over in the market.
Enough of looking at boring charts. Let’s look and see what does this mean over the last week for actual interest rates. Freddie Mac comes out on Thursdays with their primary mortgage market survey, and over the last week, no movement, so 4.45 to 4.45, so we’re right around a four and a half percent in their survey.
That’s with about a half point in fee so, that’s about right. They’re the best qualified borrowers, the 15-year hovering just under 4% and the five-one ARM doing the same. We’ve kind of been trading sideways, not a lot of movement in the market, but we would be leaning towards cautiously locking right now.
If you’re in escrow, if you’re looking at closing the next two, three, four weeks, the risks are weighted more against rates getting a little bit worse though probably not a whole lot versus them getting better.
Again, as always, if you have any questions, would like to go through your scenario, would love to hear from you. All of my contact info is in the following slide, so call, text, email. Otherwise, have a great week, and we’ll talk to you next week.