Welcome back. It’s Josh Lewis, Certified Mortgage Consultant, with the Weekly Mortgage Market Update where we take a look at interest rates and the economic factors moving the markets and where we’re likely to be over the next 30 to 90 days.
So, for those of you who have been tuning in since the first of the year it’s starting to sound like a broken record. You’ll see here we are in a very narrow range and we tested the top of that range. Top in terms of bond prices, so lows and interest rates.
We tested that last week and kind of got pushed back down, and then as we have been talking about our 25 day moving average here keeps creeping up. So, right now we are pinned between the support at the 25 day moving average and resistance up here. We’re almost up at a 50% Fibonacci retracement at the top.
So, not a whole lot of variation here. We’re at 101. 91 at the bottom, and 102, so it’s about three quarters of a point. So, this is almost a quarter of a point in interest from the top to the bottom of the range. When we get to the top, rates are about a quarter percent better. We get down to the bottom, we’re about a quarter percent worse.
So, last week we saw a lot of news and information come out, some of it good for bonds, some of it bad for bonds. The early part of the week we had two decent Treasury auctions. We had the minutes from a Fed meeting that was incredibly dovish that made it sound like the Fed is not going to be in play for raising interest rates any sooner.
They don’t see inflation being a big concern. And then we kind of got caught in this big red candle here, was the Friday economic report. It was a stronger, like an anomalously strong employment report with big downward revisions for December. So, it looked a little bit odd. I wouldn’t be surprised to see some adjustments to that next month and it not be quite as strong as it looks.
But long way of saying, we’re now going on over a month here in essentially this trading range, so December 28th, so a little bit more than a month where we’re looking at a range of about a quarter percent from top to the bottom.
Bottom line is, for the foreseeable future, rates are gonna remain good. It’s probably gonna take some really bad economic news to push rates lower, and on the flip side it would take some really strong economic news, which I don’t see coming necessarily any time soon, to push rates worse.
So, for right now, depending on your risk tolerance, we’re either in a very cautiously floating stance or cautiously locking ahead of break below this 25 day moving average.
So, to put this in terms of interest rates, if we click over here this is Freddie Mac’s primary mortgage market survey. They publish it every Thursday. It’s a trailing one week data, so it’s good data. It’s good to see trends in the market, but not real good for an accurate interest rate quote.
So, if you look at that, 4.46 for the best qualified borrowers with a half point in fees last week. So, as you can see here in the chart, really flat. The 5/1 ARM trended up last week, but in general looking at a flat overall for the market in the last seven days. And that would probably be my expectation for the next seven days.
So, barring something unforeseen, big news one way or the other, good or bad for the economy, we’ll probably have the same bit of news and real similar interest rates next week. So, if you’re in the market to buy or sell, if you’re looking to advise clients who are buying or selling and looking to borrow, not a whole lot to worry about right now, and not a whole lot to benefit from.
So, check back in next week. We’ll be sure to let you know as soon as that changes. Thank you.