Welcome back to the weekly Mortgage Market Update. I’m Josh Lewis, certified mortgage consultant and broker/owner at Buy Wise Mortgage here in Huntington Beach.
This week’s report will be quick and to the point, not a lot has changed since the last week. As always, we’re going to discuss the 90 day rate trend, we’re going to look at the national averages, show you how much money we can save you here as a broker with BuyWise Mortgage.
We’re going to look at the fundamentals, what happened in the markets to move interest rates this week. We’re going to look at the technical chart to see if we can get some insights into where the market’s going, and then as always, we’ll end up with our lock float advice for the week.
So looking at the 90 day trend, you’ll see sideways to slightly up, and we say slightly up over the last week depending on the program and the note rate, rates are up 0.125%.
So just a very, very small uptick in interest rates over the last week, much like we saw the week before. So when we look at that on the national averages, the 30 year Fannie Mae/Freddie Mac conforming loan is a 3.483.
The FHA is up to 4.642, and the VA is at 4.3. So again, all of those up less than an eighth of a percent on the average over the last week.
So how does that compare to us here at BuyWise?
We are at 4.25% on the conventional loans, on the conventional high balance, above $484,350 we’re 4.5%. A quarter percent improvement versus the national averages.
On the FHA side, 3.75% and 3.875% for the high balance. And that’s about .9% just less than .9% better than the national averages and on the VA side, 3.875 and 4% for high balance, which is just less than a half percent better than the national averages.
The important thing to look at when comparing us to those national averages is, all of those quotes that I gave you are zero points, zero lender fees, the national averages will include some amount of lender fees and points as well. Usually amounting to another couple thousand dollars of savings.
So what happened? What moved the rates slightly up this week? Not a whole lot of news, not a whole lot of market moving news, so we just kind of trended sideways.
The biggest piece of news was a strong retail sales report that was released just this morning, and that moves market expectations forward up. The Atlanta Fed does what they call their GDP now forecast.
The GDP projection increased from 2.4 to 2.8% today, based off of that strong retail sales report, so when we saw the big dip in interest rates last month, it was largely due to expectations of the economy slowing going forward, so it’s doing a little better now.
Still not above the 3% target but definitely the economy is looking to be a little bit more solid than was thought just a month ago, and that’s why we’re seeing this sideways trend. We also saw strong bank earnings, several banks reported their earnings earlier this week for the first quarter and they were stronger than expected.
Next week, 142 companies that are components of the S&P will report their earnings and that will give us probably our biggest movement in the market next week.
If it strong and it leads to the belief that the economy is doing well, we could see rates get worse, some of them come in weak, my push rate’s a little bit lower. So let’s take a look at the technical charts, see what they can tell us.
Not a whole lot here that we can glean from the Fannie Mae 4%. Because it’s pretty much sideways, not much movement at all in the last week. Prices down, so yield’s slightly up, but it’s essentially sideways. The important one that we want to look at here for this week is the 10 year treasury.
Then we look at that 10 year treasury, that black line there that has been decreasing and decreasing trend, that’s the 50 day moving average.
The 50 day moving average has been a strong ceiling on rates trying to creep up, as long as we stay below that, rates will continue to be really good, and will slightly trend down. But if we break above that average, then we could see and would see rates get worse.
The Fannie Mae security follows very closely to the 10 year. So if we see a break above that, that’s likely going to lead to worse interest rates. So what is the advice for now?
Rates are still really good, but either flat to worse in the near term. So if you’re in the market, I would recommend locking in your interest rate, take advantage of the really low rates, take the stress out of your transaction.
So big red light for this week, not that we think that rates are shooting to the moon. It’s just the risks are weighted more against us than for us.
Have a great weekend, have a great next week. I hope you enjoy the Easter holiday, and thanks for joining us. We’ll be back next week.