Welcome back to the Weekly Mortgage Market Update. I’m Josh Lewis, a Certified Mortgage Consultant and Broker/Owner here at BuyWise Mortgage, a California Broker.
If you’ve been following, we’re going to go through our typical format. We’re going to discuss the 90 day rate trend, current national averages on interest rates, how that compares to our current BuyWise Mortgage rates.
We’re gonna look at the fundamentals, what happened in the news this week to impact interest rates? We’re gonna look at a technical chart showing what’s impacting rates from a technical perspective, and then we’ll close up with the weekly lock float analysis.
All right, so jumping right in. If you look over here at the 90 day rate trends, it’s still intact. Longer term, 90 days, rates are still sliding downwards. Over the last week, we were up about an eight. We’ve stabilized.
I do expect over the long run that this downtrend will continue, and will continue lowering rates. But for the time being, we’re up about an eight over the last week, so a flat to sideways in our overall longer term down trend.
What does that actually mean for interest rates? You see the chart here from the Optimal Blue Mortgage Market Index. Here are the major rates. The 30 year Conforming Fannie Mae, Freddie Mac loan on the average with lenders across the country last week was at 4.42%. FHA was at 4.646%. And VA was a little bit lower at 4.243%.
Let’s take a look at how that compares to our rates here at BuyWise Mortgage. At BuyWise on the Conventional loans, we are currently at 4.125%. Like I said, all these across the board are up about .125, or one eight of a percent from last week. The conventional standard balance at 4.125%. The high balance above $484,350 if that is available in your area, which is in high cost counties. LA, Orange County, Bay Area, we would be looking at 4.375%. That is about .295% lower than the national average.
On the FHA side, standard balance is at 3.625%, high balance is at 3.875%, so excellent rates still under 4% despite the fact that they’re up week over week. And that is about 1.021% lower than the national average. The government loans on the broker side, we are much, much lower than what you’ll see from most banks and direct lenders.
With the VA concluding there, 3.75% on a standard balance, 4% on a high balance. All of those rates again are zero points and no lender fees. The VA there is just about a .50% lower than the national averages.
What actually happened this week? If we’re up an eighth of a percent, why is that? We’re gonna look at the technical chart in a minute. It is primarily a technical consolidation. We had a nice long run up in bond prices, down in interest rates over the last two, three weeks.
The market is just correcting. Markets have a tendency to get out a little bit ahead of themselves, and then they’ll correct, and either continue on in the same direction, or drop down into the earlier direction of the trend.
The only real market mover this week was yesterday’s jobs report. It was a mixed report. We had upward revisions to January and February. The actual number for March was stronger than what was expected, but not much, just a little bit. That was the positive.
The negative mixed in there is the unemployment rate was flat, which it was expected to continue to go down, which is actually good for interest rates. The negative news in that jobs report is what’s good for interest rate. A hot jobs report implies that we’re gonna have wage inflation. Inflation of any sort will lead to higher interest rates over the long haul.
The most important thing in the news yesterday was that the average hourly earnings year-over-year were only up 3.2%. They were expected to be up 3.4%. That may not mean the best news for your actual paycheck, but it does mean the best news for your mortgage payment.
As I said, the most important thing we were seeing here, if you look at the technical chart, we go back from November through December over a period of about 56 days, we had a 306 basis point improvement in interest rates. That’s about a three quarter percent improvement in rates. Rates have gone up into the low fives, and went down to the mid fours over about a two month period.
And then from there, we went flat. You can see from the yellow arrow there. Flat, as the market consolidated and said, what’s happening here? Is this right? Is this the correct level? They were looking at the news reports to see, is the economy hot, is the economy slowing?
As the news came out that it looks like the market is gonna slow, the Fed is not going to be raising interest rates, they may be reintroduce some of the quantitative easing, that’s when we saw over the last 22 day, so a three week period, 140 basis point improvement. That’s about another three eights a percent in interest rates. We went from about that four and a half down to 4.125 on your conforming conventional rate. And then, back under 4% on your government loans.
What we’ve seen over the last week is really just a correction. We had another big move to what is probably the new level right now, which is the very low fours and high threes for government loans. The market is consolidating that and deciding where do we go from here?
My guess is, they will continue to inch lower throughout the year, but the most important thing when we’re trying to save for our client whose in the market to refinance now, or can benefit from a refinance, or get some property in escrow today, do we lock the loan, or do we float?
Last week, we had a green flag. I’m gonna move that to the yellow light for this week, and it just says, caution. I think the market is going to move sideways. I don’t think we’re gonna go up, or down significantly in rates over the next week, or two. But, if you’re aggressive you can cautiously float, and see if we continue some improvement.
For most people, rates are really good. Lock them in. Take advantage. And if you’re able to refinance and lower your payment, get some cash out at a really good interest rate and that makes sense, do it. If you’re in escrow and you’re going to close in the next two, three, four weeks, these are excellent rates.
There is a lot to stress about during a real estate transaction. Remove the stress from it, and just lock the interest rate in, and know what you’re dealing with, and know what your cash to close looks like.
As always, I believe strongly we have some of the best rates available, and the best combination of expert advice, service, and low interest rates. If we can help you in any way with a refinance, with a purchase, if you’re a real estate professional working with clients and want the best of both worlds, give us a call. Thanks for joining us. We’ll see you next week.