Thank you for joining us for the weekly mortgage market update. I’m Josh Lewis, certified mortgage consultant and broker owner here at BuyWise Mortgage in Huntington Beach, California.
As always, we’ll follow the same format here. We’re going to look at the 90-day rate trend. We’re going to show you the national averages on interest rates. How that compares to our rates here at BuyWise and how we can save you some money. Then we’re going to look at the technical factors and the actual fundamentals that happened in the news and see if we come with a rate float, a lock recommendation for you for the coming week.
All right, so not a lot of action. A very flat week. But if you look over here, you’ll actually see a little bit of jagged movement on the chart. Just tells us we had some volatility. Midweek rates improved to the best level in the last two years. By Friday they’d essentially popped back up, moved to unchanged.
What does that actually mean? The 30-year fixed conforming on the national average is right over 4%, the FHA is about 4.2%, and then the VA is at 3.756%.
Looking at what we can do here at BuyWise, all of our rates are always 0.0 fees. We don’t charge underwriting doc, any first party fees.
Our conventional loan rate is 3.875%, a little bit more than an eighth better than the national average. High Balance Loan amounts over 484, 350 for those high-cost areas like L.A., Orange County, the San Francisco Bay area, San Diego. Those would be at four and an eighth.
On FHA we’re three and a quarter and three and a half on the high balance. Again, a little more, right around a percent better than the national averages. So a big difference on the government loans.
VA at three and a quarter and three and a half. About a half percent better than the national averages. So either way you slice it, we can definitely save you some money here.
But let’s look at what actually happened in the markets. Look at the technical charts and see if we can give you some insights into what’s going to happen with interest rates going forward. So the big news this week, the Fed had a meeting Tuesday and Wednesday with a full press conference. Ahead of that, the European Central Bank, basically their version of the Fed, they came out and announced that they would actually be entertaining additional asset purchases, which they had promised to stop. So it’s a form of quantitative easing, sort of like a Fed rate cut or it sort of has the same impact as a Fed rate cut. So that got interest rates moving a little bit better.
Then on Wednesday at the press conference, Chairman Powell basically made it pretty clear that the Fed’s going to cut next month at their meeting in July. So we’ve got about six more weeks, but they’re likely to cut. The way markets work they’ve already priced that in. We saw a nice little knee jerk reaction and that was basically our best interest rates of the week.
Due to the likelihood of the Fed cutting, what that means for weakness in our economy. We saw the dollar weakened also, which has some additional negative impact on our interest rates and could have been some of the reason why we had about Thursday and Friday in the market.
At the end of the day a lot of action with little direct impact. Nothing really happened. You see our rates are almost exactly the same as they were last week despite a lot of movement in the market.
What do we want to look at? Where are we at here? So this is the mortgage back security, three and a half percent mortgage back security, and we’re looking at that. You can see, we had that big green update there on Wednesday and then gave it back on Thursday and Friday.
We had pierced above. We were kind of going along sideways in this channel that we have the pink highlight on there. We have broken out of that into the higher channel, which higher in bond prices is good for interest rates. So we’re really excited about that on Wednesday. Needed confirmation on Thursday that that was going to be the new trend and we would probably start going sideways in that towards making a push towards the top of that channel.
Well, late in the day Thursday for no particular reason, market sort of so.ld off and closed just below that line of resistance that we were hoping had become a level of support what we saw on Friday, more sales. So, in essence, we’re in that pink channel again, still, didn’t break out to the new higher range. I think we eventually will. And what tells us that? If you see the Green line there, that trend line up in bond prices is still definitely intact.
Where we are in that channel? We’re still towards the high end of the lower channel there. We also have the 25-day moving average of support coming up. We have that Fibonacci level there for us, and we have the long-term trend line. So all of those things would indicate that we will continue to go sideways to slightly better and eventually make our move up into that next channel.
Here is the last thing we want to look at. The 10-year Treasury. Same thing. Was going down, down, down, popped up a little bit Thursday and Friday, but that down channel is still intact. And what we want to look at there, the Friday close, the 10-year US Treasury was 2.059. Its level of resistance on the way up is a 2.07. As long as we stay under 2.07, we still have that downtrend intact and rates will look to move better.
What does that tell us? Tells us we’re likely to see a lot more sideways movement. Probably more volatility day to day. I don’t expect a lot of movement one direction or the other. If you’re close to closing on a purchase or if you’re thinking about taking advantage of the great rates and locking something in, probably a great time to do so. Don’t see any big huge improvement in rates in the near term. By the same token, don’t see anything getting worse. So we’ll give you a yellow-green light, just depending on your risk tolerance.
Again, thank you for joining us. Hope you found this helpful. If you have any questions, you want to talk about your specific scenario and see what type of financing or loan structure would work best for you, we’d love to do it.
We did a bunch of second opinions this week. A couple of people were in good hands with the lender they had spoken with. A couple of them were really getting taken advantage of.
We were able to save them, one gentleman probably $15,000 to $20,000 between his closing costs and the interest rate over the life of the loan, and we’d love to do the same for you.
Thanks for tuning in. Hope to see you next week.