Welcome back, I’m Josh Lewis, certified mortgage consultant and broker/owner of Buy Wise Mortgage here in Huntington Beach, California, with your weekly Mortgage Market Update.
If you’ve been watching, you know the format. We’re gonna discuss the 90 day rate trend, see what direction rates have been moving. We’re gonna look at the current national averages.
We’re gonna show you how much money we can save you versus those averages here at Buy Wise Mortgage. We’re gonna look at the fundamentals, what happened in the news this week that moved interest rates.
We’re gonna look at the technical charts, see what’s likely to happen going forward. And we’re gonna end that up with rate lock and float advice for you.
So if we look at the 90 rate trend here, the longer term trend is still intact, but over the last two weeks we’re up about an eighth of a percent. If you’ve been watching the news, they most frequently on Thursdays quote the Freddie Mac Primary Mortgage Market Survey, it’s a backwards-looking number and it generally overstates things.
They’ve been talking about rates up the last two weeks, rates are up about a total of an eighth of a percent in the last two weeks. So not much of an up trend, and the longer term trend is definitely still for rates to be lower.
But when we get to the technical charts, we’ll show you there are some important levels that we are at right now that need to hold in the next week.
So on the national averages, the 30 year fixed rate, Fannie Mae and Freddie Mac conforming loans is at 4.405% in the Optimal Blue Mortgage Market Index.
That is a measurement from a piece of software that 30% of the lenders in the country use, and that’s numbers as of yesterday of what rates are actually being locked at by lenders across the country. So on the FHA side, the FHA rates are at 4.595% and VA at 4.252%.
So when we look at how this compares to the Buy Wise rates, you can see there’s a significant difference.
On conventional loans under $484,350, we’re at 4.125%, which is over a quarter better than the national average.
And again, ours are with zero points and no lender fees. We don’t charge an admin fee, a processing fee, an underwriting fee, an origination fee, an application fee. Any of those junk fees, we do not have. And we’re still about a quarter percent lower on those interest rates.
High balance Conventional is at 4.375%, so if you’re in a high cost county that offers high balance loans above $484,350, you pay a little bit of a premium for that. On the FHA loans, we’re at 3.75 and 3.875 for the high balance, and that’s just a little bit less than a full one percent better than the national average. On the VA side, we’re at 3.75% and 4.00%, and those are just about a half percent better than the national averages.
So let’s take a look at what happened this week. And the short answer is, not a whole heck of a lot happened. That’s why rates were essentially flat to just a slight bit worse than last week.
Slightly positive news out of China with some of their economic indicators. And the same out of the European Union, their central bank there is going to continue their quantitative easing, which is likely to help out their economy.
So just a little bit of strength there leading to a little bit of a weakness in the bond markets. Really we’ve been looking at this technical consolidation, we had a big improvement through November and December, then we had a flat market for a couple of months, saw another big improvement.
The market is just kind of trading sideways, seeing where the next move is at.
So for right now, the most important thing we wanna look at is the technical charts. So when we look here at the Fannie Mae 30 year, you see the red arrow there, and that’s showing the down trend in bond prices over the last couple of weeks, with rates up about an eighth of a percent.
So the headlines say rates are higher, in reality, in terms of your interest rate, your monthly payment, not much movement. But you’ll see we are at some really critical levels.
The 30 year mortgage backed security, the Fannie Mae bond, is below a 50% retracement level, and closing right below the 25 and moving in on that 50 day moving average there. Those moving averages are important.
So right now, the one we really wanna tie into is the 10 year treasury. The mortgage backed security follows the 10 year treasury, but the 10 year treasury is absolutely the leader here.
In the early part of next week, we’re gonna be looking at this closely, because the 10 year US treasury that mortgage backed securities most closely follow is pushing against its 50% retracement level. That’s a level of resistance.
As long as that resistance holds and pushes us back lower, we should see interest rates improve.
So we’ve got a couple of layers of resistance there that should help us. So right now what is our lock float advice? We are recommending locking. Hopeful and positive that that level of resistance will hold early next week and we’ll see some improvements.
But if they don’t, we will see a little bit of a pop higher in interest rates. So for now we’re gonna be cautious, we’re gonna take the gains that we have on the table, and we would be recommending locking if you have a refinance or if you’re in escrow on a purchase.
We have all of our clients locked. That’s what we would recommend for the time being.
So thank you for joining us. Hope you found this helpful, and hope you join us again next week. Have a great week, and talk to you soon.