Welcome back to the Weekly Mortgage Market Update. I’m Josh Lewis, Certified Mortgage Consultant and Broker/Owner here at BuyWise Mortgage, a California Mortgage Broker.
We’re going to take a look at the trends in interest rates over the last 90 days, show you where rates are currently and compare that to national averages.
Then end up here by taking a look at the technical charts and seeing what we can glean over what’s likely to happen over the next couple of weeks. So you can make educated decisions out in the market.
So starting here, as you can see going back to December we have been in a downtrend. Downtrend has stalled out for the last 60 days or so. We’ve been really flat here. We had a little bit of an uptick but back down. So really just trending sideways for the last 60 days. So in terms of actual interest rates, let’s take a look at what that actually means today.
Conventional rates are about 4.375, high balance a little bit higher than that at 4.5. So if you’re in a high cost area, high cost county, Los Angeles County, Orange County, the Bay Area, all of those areas have high balance loans. The larger loans are a little bit higher 4.5%. FHA at 3.75, FHA high balance a tick higher at 4%.
VA at 3.875 and the VA high balance at 4.08. So looking at the Delta to the National average, which we’re going to look at on the next screen, here at BuyWise we’re about .173 lower than the high balance national average. FHA, we’re a full percent lower than what that national average is and the VA about a half percent lower than the national average.
So where are we pulling those national averages from? Optimal Blue is the biggest pricing engine in the industry. So this is the actual rates locked yesterday through the Optimal Blue system. So it’s the best look at what lenders are actually doing on a day to day basis. So 4.673 is where the national average is for your 30 year fixed conforming loans.
Thirty year VA a little bit lower at 4.5 and strangely in this index, large [inaudible 00:02:10] is dominated by direct lenders versus brokers and other lower cost sources, the FHA is at 4.83 on a national average.
What we want to look at here, finally, is where we are in the market in terms of technical analysis. You can see this shows the opposite trend, where bond prices have been increasing. You remember bond prices going up decreases the yield or the interest rate. So we want to see these green candles and see them going up.
So we had a really nice run up through the first of the year and we’ve been going sideways, sideways, sideways. Last week we had a little bit of a scare where we fell to the bottom of this channel, but popped right back above it this week and we’re really trending sideways. What that means for us is there’s not a defined trend until we have a break out to the upside or the downside, not a whole lot to worry about. What I would say is, we are cautiously floating.
So what does that mean? You’re looking at a yellow flag. Not a green light to keep things floating and hope for better interest rates, not a red light that we’re shooting up and you need to stop, but just cautiously floating looking to see where the market is.
Once you get inside of 30 days to your closing, if you’re purchasing, or if you’re opening up a refinance, probably a good idea to just get them locked until we see a break out of this trend to the upside. Not a lot to gain, not a whole lot to risk, but again, cautiously floating or if you get within 30 days, probably looking at locking at this time.
Hope you found this information helpful. If there is anything we can help you with, my contact information is on the final screen. Have a great week and we’ll talk to you soon.