Mortgage rates moved lower today--somewhat significantly relative to recent examples--ultimately hitting the best levels in more than a week for most lenders. Trump's tariff announcement served as a catalyst for market movement in both stocks and bonds (which underlie mortgage rates). Investors currently view the proposed tariffs as something that would do more harm than good for the overall economy. Economic growth generally corresponds with rising rates, so anything that calls it into question can have the opposite effect.
It's too early, at the point, to know if the tariff-related news will be a big deal for rates apart from today's headline shock value. What we do know is that rates are officially putting up their best fight so far this year when it comes to pushing back against the dominant trend (the one that's carried average mortgage rates more than half a point higher). While many lenders aren't in much better territory than Monday morning, lenders who released updated rate sheets this afternoon are in the best shape in more than 2 weeks. We haven't been able to say "2 week lows" since early December.
Loan Originator Perspective
Bond markets posted modest gains today, but still remained below Monday's levels. We may be establishing a new range here, which would certainly beat rates continuing higher. I'm not ready to contemplate floating deals yet, since there's no apparent motivation for yields to fall, but at least we're not posting daily sell-offs either. Ted Rood, Senior Originator
We might actually have 2 green days in a row in the bond market. It has been a while. Bonds have still not broken any important levels, so i continue to favor locking. I would wait until as late as possible as reprices for the better are a possibility. -Victor Burek, Churchill Mortgage
Today's Most Prevalent Rates
Fourth of July weekend
ended a six-day drop in rates we hope continues Tuesday into the month. 3.75%
became 3.5% for conventional loans and FHA/VA start at 3.25%. What does it mean
if you’re buying a home? 3.625% Fannie/Conventional might give you .875% (or $3,500
paid of your closing costs on a $400,000 loan amount). Not bad.
FHA and Veterans can
expect all closing costs paid at 3.625%--zero down for Vets, 3.5% for FHA
buyers. Something to jump on now there are a few more homes joining the
inventory in So. California.
While I have a buyer
looking with her agent for four months now, Diana Arnold’s Inland Empire buyers always get
their home within the first to second offer. In the eight years I’ve worked
with her, Diana and I have not lost one home or loan for her buyers. Don’t
forget first-time buyer programs like MCC, a tax credit that pays you back in cash
on tax refund, 20% of your annual mortgage interest. The best program out there
to help qualify for a little higher payment, offset that car payment or just
help your monthly budget!—Anne E James is CEO/Broker of Reliance Mortgage
Service and can be reached at 562-619-2058 or firstname.lastname@example.org. Anne has been in
the mortgage lending business for 25 years.
Thanks to ‘Brexit,’ the Yield on the 10-Year is Still
Falling, but Loan Brokers Notice Wholesalers Have Yet to Act
By Paul Muolo
Thanks to the "Brexit" vote, the yield on the benchmark 10-year
Treasury bond keeps falling, but mortgage brokers have noticed that their wholesale
partners haven’t cut rates very much, at least not yet.
“Some have cut their rates, but not a huge amount considering that the
yield [on the 10-year] went from 1.68 percent to 1.48 percent,” said Brian
Benjamin, who runs Two River Mortgage & Investment in Red Bank, NJ. “Even
so, at the end of the day everyone will tell you LLPAs [loan-level price
adjustments] are still a major factor as many loans have lower downpayments.”
Marc Savitt, president of The Mortgage Center, Martinsburg, WV, said he
didn’t see any wholesale cuts in rates on Friday and not much on Monday
morning either. “Not yet,” he said.
Andrew Peters, CEO of First Guaranty Mortgage Corp., a retail and
wholesale funder, said his shop is staying the course for now. He noted that
FGMC is “focusing more on making sure we have the proper risk controls in
place to deal with the market volatility over the coming months.”
Other areas of
Lending & Servicing, Trends