Welcome back to the Weekly Mortgage Market Update. I’m Josh Lewis, Certified Mortgage Consultant, and Broker/Owner at BuyWise Mortgage.
As always, we’re going to start with the 90 Day Rate Trends, show you what rates have been doing. Look at the national averages, compare that to the BuyWise current available rates.
Then look at what happened in the news this week to move markets. What’s happening in the technical analysis. And then give you a rate lock float recommendation going forward.
Here we start with the 90 Day Rate Trends. You can see, for about six weeks here, we’ve been flat, just going sideways on the different types of loans.
What does that mean for us currently? Conforming rates, the 30 Year Fixed Fannie Mae, Freddie Mac loan, 4.421%, according to the Optimal Blue Mortgage Market Index for May 10th. FHA at 4.592%, and VA down at 4.194%.
How does that compare to us at BuyWise? We are a broker, we charge zero points. We have zero lender fees.
That’s going to be what you’re looking at for all of these options. Whereas, the previous loans had lender fees and some combination of points in there.
On the conventional loans, we’re at 4.125%, which is about 0.3%, almost a third of a percent lower than the national average. On the high balance loans, which is any loan over $484,350, if you’re in a high-cost area where those loans are available, is at 4.375%.
Again, for the FHA and VA loans, all the government loans, the rates just continue to be spectacular.
For both FHA and VA, 3.75 for the standard balance, 3.875 for the high balance, if you’re in one of those areas.
For the FHA, we’re almost a full percent lower than the national average, and VA, just under a half percent better than the national average.
Whether you’re borrowing $300,000 or $600,000, those are real numbers over the life of the loan, you will save $20,000, $30,000, $40,000, $50,000. We’d love to show you what those numbers look like.
What happened this week, like we said, not a whole heck of a lot. It was a light news week without much to move the markets. The China trade talks broke down. It looked like a week ago that we were going to see the trade deal go through.
China tried to change some of the provisions in the Trade Pact, and by the end of the week nothing was settled and tariffs were increased on Chinese imports. A lot of Chinese imports, up to about 25%. If that stays in place long term and we don’t get a deal put together, that will have an impact and a drag on the economy.
For the week, because of those talks going back and forth, stocks were really volatile. Several days where they were down a lot, intraday, but didn’t carry those losses into the end of the day. They’re down on the week, but now a big huge movement like we feared intraday, a couple of days when stocks were way down.
There were also a couple of Treasury auctions last week. They auctioned some 10 Year Notes and some 30 Year Notes. With both of those, not strong demand, so didn’t really cause rates to get any worse. But obviously, it kept us from seeing some follow through and rate’s getting better.
I kind of hinted at this earlier. This is the chart of the Fannie Mae 30 Year – 4% Security, going back about 90 days. For the last six weeks here, we’ve been in this tight little range. To put it into context, from here at the top, all the way to here at the bottom, best rates, because again, the bond price is high, interest rates low.
From the best rates to the worst rates over the last six weeks, we have a 60 basis point range. That’s really at about 0.125% interest, or an eighth of a percent. Very little difference going on six weeks. The technicals are positive.
We’re still above the 20 and the 50-day moving averages, kind of sitting here right above this Fibonacci level, 50% retracement. Neutral, but slightly positive, if we were to try and paint a picture of it one way or the other.
Same thing over here when we look at the 10 Year Treasury. This is the actual yield on the treasuries. This trend, this down-line, is still in place, but over the last six weeks, really just sideways here. We’re below the orange line, which is a 25-day moving average. The black line, that’s a 50-day moving average. Then there at 50% Fibonacci retracement.
If we were to guess which way we’re likely to break out, it would or should be to the good side with lower interest rates, but the market has just been going sideways and not a whole lot to move us one way or the other. Until stocks break down and we see a bigger market correction, we’re probably just going to continue trading sideways.
If you’re in the market to buy or sell, and you’re borrowing a mortgage, taking out a mortgage, and you want to know what you should be doing, I don’t see a whole lot of risk of rates getting a lot worse, but also, in the near term, not a whole lot of hope for rates to get better.
Because that can be one additional piece of stress, our recommendation is definitely to remain locked right now. Not because we think there’s a lot of risk in floating, but if you’re with inside of 30 days of closing on your refinance, or on your purchase, probably a good idea to lock.
That’s something that we want to do for our clients, and we have 98% of our pipeline locked right now, just because we don’t want to give up any of the good the return, we want to take the stress out of the situation.
If you’d like to talk about your situation, I’m just a phone call away. Phone call, email, text, whatever works best for you. All my contact info is on the final screen here. Thank you for joining us. Hope you found this helpful and hope you join us again next week. Have a great week.