June 2020 mortgage rates are starting the month near all-time lows. The dominant news story that has the most impact on consumer mortgage rates continues to be COVD-19 and the re-opening of our economy. Economic data will continue to be abysmal and will most likely have little impact on mortgage rates unless it comes in better than expected or significantly worse than expected.

The biggest risk for mortgage rates is the economy “bouncing” back faster than expected. That could easily push rates higher.

If you are looking to purchase a home or refinance a current mortgage be sure to contact me directly (you can use the contact form below or call my direct number: 1-800-550-5538) for a no-cost/no-obligation quote.

June 2020 Mortgage Rate Forecast For California

Here are our June 2020 mortgage rate forecasts for California:

30-year fixed rates below 3.375%
20-year fixed rates below 3.25%
15-year fixed rates below 3.00%

This is based on a loan amount of $300,000, primary home, excellent credit (740 or higher credit score), and a Loan-To-Value ratio below 75%. We may see periods in which rates spike higher however overall we believe there will be opportunities to lock at or below these levels throughout the month of June.

June 2020 Mortgage Rate Chart

Here is a quick reference guide to June 2020 mortgage rate possibilities (these are not quotes; just examples) and the payments associated with each level based on various conforming loan amounts. See our important disclosure below.

30-Year Fixed Rate Mortgage:

Term	Loan Amount	Mortgage Rate	Payment
30-year fixed	$225,000	3.125%	$963.84
30-year fixed	$325,000	3.125%	$1,392.22
30-year fixed	$425,000	3.125%	$1,820.60
30-year fixed	$525,000	3.125%	$2,248.97

20-Year Fixed Rate Mortgage:

Term	Loan Amount	Mortgage Rate	Payment
20-year fixed	$225,000	3.00%	$1,247.84
20-year fixed	$325,000	3.00%	$1,802.44
20-year fixed	$425,000	3.00%	$2,357.04
20-year fixed	$525,000	3.00%	$2,911.64

15-Year Fixed Rate Mortgage:

Term	Loan Amount	Mortgage Rate	Payment
15-year fixed	$225,000	2.75%	$1,526.90
15-year fixed	$325,000	2.75%	$2,205.52
15-year fixed	$425,000	2.75%	$2,884.14
15-year fixed	$525,000	2.75%	$3,562.76

Important Disclosure: The above is not a mortgage rate quote; nor is it an offer to lend. It’s only a generic example of various mortgage rates, loan amounts, and payments. Our mortgage rate chart is meant to educate and inform our readers. The current market may be higher or lower than the examples listed in these rate charts. Also; mortgage rates can and often do adjust multiple times a day.

California Mortgage Calculator

Using a mortgage calculator to figure out your monthly mortgage payment is an essential part of buying a home in California or refinancing a current mortgage. Use our free mortgage calculator to help you determine what you can afford and if you have questions please don’t hesitate to ask!

Coronavirus and Mortgage Rates

The Coronavirus continues to have a big impact on mortgage rates. That impact has shifted a bit since March/April when the impact was to push mortgage rates lower. As we move into June it appears the impact on mortgage rates could be negative as the number of hospitalizations and deaths slows. Another impact could be positive data from one of the various vaccine trials currently under development.

That being said; with the economy re-opening, we could see a surge in new cases later this month which might have a positive impact on mortgage rates if that surge is significant (negative news is good for mortgage rates and positive news is bad for mortgage rates).

Mortgage Rate FAQ’s

Here we answer some popular questions about mortgage rates in California.

Will Mortgage Rates Go Higher In June?

It’s very possible considering we are near all-time lows to start the month. Mortgage rates in June will mostly be influenced by how the economy handles this current economic downturn and if cases continue to slow or pickup.

Is A 3.125% or lower 30 Year Fixed Mortgage Rate Good?

A 3.125% 30-year fixed mortgage rate is a phenomenal mortgage rate. If you are buying a home or refinancing a current mortgage you should not hesitate to lock in a 3.125% 30 year fixed rate.

Is A 2.875% or lower 15 Year Fixed Mortgage Rate Good?

From April to mid-May 2020 15 year fixed mortgage rates did not improve that much however that has changed and if you can lock in a 15 year fixed rate at 2.875% or lower you should not hesitate to do so. Mortgage rates are difficult at best to predict and at times can move significantly higher in a short period of time. Avoid taking too much risk when it comes to locking a lower-rate mortgage.

How Do I Get Zero Closing Costs On A Refinance?

Not everyone can get a zero closing costs mortgage. The best thing to do is to discuss this option with your Loan Officer. Those looking to refinance a rental property will find it difficult. Also, homeowners looking to take cash out, multi-unit properties, low loan amounts, high loan to value ratio, and less than perfect credit will also find obtaining a zero closing cost mortgage difficult.

Primary residences, $250,000 – $510,400, high credit score, and a low loan value ratio is the sweet spot for obtaining a zero closing cost refinance.

It’s important to remember that when you are doing a zero closing cost refinance a lender credit will cover all of the closing costs being charged.

Will A Mortgage Forbearance Have a Negative Impact On Me?

It could so it’s important to only take the Forbearance option if you absolutely need it.

For additional mortgage information visit our Scoop.it! page.

Update Mortgage Guidelines June 2020

Heading into June mortgage lenders continue to be more restrictive compared to the pre-Coronnavirus lending environment. The biggest news is for Self Employed borrowers.

If you own a business be prepared to provide some additional documentation. Be prepared to provide a 2019 P&L (if you’ve not filled your 2019 returns, a 2020 YTD P&L, and/or two months of bank statements showing continuous income. Some may need to provide a CPA-certified P&L if bank statements can not be provided.

Also; at the time of closing you’ll need to show the business is still active (there various ways of doing this).

The good news is that consumer mortgage rates remain the same for Self Employed borrowers (when compared to non-Self Employed borrowers).

Fed Meeting June 2020 And Mortgage Rates

On June 10, 2020, the Fed concluded its two-day meeting. Here are some of the important points from that meeting (news wire):

FED’S MEDIAN VIEW OF FED FUNDS RATE AT END-2021 AND 20222 0.1%
FED SAYS TOTAL PURCHASES DURING THIS MONTHLY PERIOD ARE EXPECTED TO BE APPROXIMATELY $96 BILLION
FED SAYS AGENCY MBS PURCHASES WILL BE CONDUCTED ON A MONTHLY BASIS, STARTING WITH THE PERIOD FROM MID-JUNE TO MID-JULY
FED SAYS IT WILL INCREASE ITS HOLDINGS OF TREASURY SECURITIES AND AGENCY RESIDENTIAL AND COMMERCIAL MORTGAGE-BACKED SECURITIES OVER COMING MONTHS AT LEAST AT THE CURRENT PACE TO SUSTAIN SMOOTH MARKETS
REPEATS CORONAVIRUS CRISIS WILL WEIGH HEAVILY ON ECONOMIC ACTIVITY, EMPLOYMENT AND INFLATION IN THE NEAR-TERM PERIOD
FED REPEATS IT’S PLEDGE TO USE FULL RANGE OF TOOLS TO SUPPORT U.S ECONOMY

What does all this mean for consumer mortgage rates?

In general mortgage rates should remain somewhat low for an extended period of time. That does not mean they’ll stay as low as they are currently. We could easily see mortgage rates move to the high 3’s or low 4’s and overall mortgage rates would still be low historically.

Also, this is not a guarantee. There are many other factors that impact mortgage rates. The Fed could easily be wrong (it would not be the first time) so when it comes to locking in a rate it’s best to be safe and lock-in (rather than waiting).

Economic Calendar For June 2020

Here we cover the daily economic events that might impact mortgage rates. After the report comes out we’ll update the post with that information and comment on if there is a potential impact on the Mortgage-Backed Securities market and consumer mortgage rates.

The first week of the month will be important for June 2020 mortgage rates.

To start things off we have:

ISM Manufacturing report
ADP Employment
ISM Non-Manufacturing PMI
BLS Employment report

Tuesday – June 30th:

Chicago PMI: The Chicago PMI came in at 36.6 which was below expectations (45.0)
Consumer Confidence: The Consumer Confidence report came in stronger than expected. The current reading came in at 98.1 after last month’s reading of 86.6.

Monday – June 29th:

Pending Home Sales: Increased to 99.0 after last month’s reading of 69.0

Friday – June 26th:

Consumer Spending: Consumer spending increased 8.2%.
Core PCE Inflation: The Core PCE reading came in at 0.1 after last month’s decline of -0.4.
Consumer Sentiment: Consumer Sentiment came in at 78.1.

Thursday – June 25th:

Weekly Jobless Claims: Weekly Jobless Claims came in at 1,480,000 claims compared to last weeks 1,508,000 jobless claims.
Durable Goods: The Durable Goods report came in at 15.8 (vs last month’s reading of -17.7)
Q1 GDP Final: Q1 final GDP was -5.00%

Wednesday – June 24th:

Mortgage Market Index: The Mortgage Market Index fell from 846.9 to 773.1 (both refinance and purchase applications declined.

Tuesday – June 23rd:

PMI-Composite June: Last month the PMI-Composite came in at 37.0 and this month it came in at 46.8.
New Home Sales May: New Home Sales increased significantly from 623,000 units (annual rate) to 676,000 units (annual rate).

Monday – June 22nd

Existing Home Sales: Existing Home Sales came in at 3,910,000 units (annual pace) which is nearly a 10% drop from last month.

Thursday – June 18th:

Weekly Unemployment Claims: Analyst and investors had expected the weekly unemployment claims would come in at 1,300,000 claims however the weekly report remained just above 1.5 million claims. Continued claims remained above 20 million.
Philly Fed Index: The Philly Fed Index smashed last month’s decline of -43.1 and came in at a positive 27.5.

Wednesday – June 17th:

Mortgage Market Index: The Mortgage Market Index pushed higher to 846.9 (last week it was 784.5). Both Purchase and Refinance applications surged in the latest survey.
Housing Starts: Housing Starts for May also increase from an annual rate of 891,000 units to an annual rate of 974,000 units.

Tuesday – June 16th:

Retail Sales: Retail Sales came in much stronger than last month (-16.4% vs +17.7%).
NAHB Housing Index: The NAHB Housing Index for June came in stronger as well (45 vs 58)

Friday – June 12th:

Consumer Sentiment: Consumer Sentiment increased for June. Moving from 75.0 to 78.9.
1 year and 5-year Inflation Outlook: The 1y Inflation Outlook decreased from 3.2% to 3.0% and the 5 year Inflation Outlook decreased from 2.7% to 2.6%.
Import and Export Prices: Import Prices increased 1.0% and Export Prices increased by 0.5%

Thursday – June 11th:

Weekly Unemployment Claims: Unemployment claims came in at 1,542,000 vs last week’s 1,877,000.
Continuous Unemployment Claims: Continuous Unemployment Claims came in lower this week. 21,487,000 last week vs 20,929,000 this week.

Wednesday – June 10th:

Mortgage Market Index: The Mortgage Market Index (MMI) came in higher this week; 784.5 (last week’s reading came in at 717.7). Both refinance and purchase applications increased.
Consumer Price Index (CPI): The monthly CPI declined -0.1% and the annual rate increased 1.2%. Previous to 2020 this economic report was super important to bond markets and consumer mortgage rates.

Tuesday – June 9th:

Wholesale Sales: Wholesale Sales declined -16.9% (expectations were for a decline of -4.0%). Last month the decline was -5.2%.

Friday – June 5th:

Employment Report: A blockbuster report that some question. Analysts were expecting -8,000,000 jobs lost however the report showed the economy gained 3,094,000 jobs. Post report bonds sold off significantly and consumer mortgage rates were under pressure to move higher.
Consumer Credit: Expectations are for Consumer Credit to decline -20$ billion.

Thursday – June 4th:

Weekly Jobless Claims: This week’s Jobless Claims report came in lower than last week’s; 1,877,000 job loss compared to 2,123,000 jobs lost. Continuing claims rose from 21,052,000 to 21,487,000 continued jobless claims. With the economy reopening the weekly jobless claims report is going to become more and more important to mortgage rates.

Wednesday – June 3rd:

ADP Employment Report: The ADP report came in significantly better than expected (-2,760,000 jobs loss vs expectations of -9,000,000 jobs lost). This caused the bond market to selloff and it could end up pushing mortgage rates higher.
Mortgage Market Index: The Mortgage Market Index came in lower than last week (717.7 vs 746.5). Refinance applications decline while Purchase applications increased.
ISM Non-Manufacturing PMI Report: Like the ADP Employment reports the ISM Non-Manufacturing PMI report also came in stronger than expected (45.4 vs expectations of 44.0).

Monday – June 1st:

ISM Manufacturing PMI: Today’s ISM Manufacturing PMI report came in at 43.1 after last month’s 41.5 report.

Mortgager Rates And The Monthly Jobs Report

May’s jobs report was significantly better than anticipated. Analysts and investors were anticipating a loss of 8,000,000 jobs and an unemployment rate of 19.8%.

They were way off.

The report came in at 3,000,000 jobs created (not lost but created) and an unemployment rate of 13.3%. The stock market went up big, the bond market sold off and consumer mortgage rates went higher. Then came the Washington Post story of how the report was not accurate.

According to the report BLS admitted that the report had errors and the unemployment rate was at least 3% higher. Also, they admitted that the April report had errors as well.

What is surprising about this is that BLS is aware of the issue however they have not fixed it. Also, they didn’t put out a disclaimer saying this when the numbers hit the wire but rather did a footnote in the lengthy report that was issued that day.

June 2020 Mortgage Rate Average

We’ll update this section as we move further into June however to the start of the month we’re seeing the following averages.

The average 30-year fixed-rate in California is 3.25%.
The average 20-year fixed mortgage rate is below 3.125%.
The average 15-year fixed-rate in California is 2.875%.

This is an average of everyone we’re seeing; from less than perfect credit to excellent credit. Please keep in mind that June 2020 mortgage rates adjust daily; sometimes multiple times during a day. For a quote specific to your situation please be sure to contact us directly.

Mortgage-Backed Securities & Treasury Snapshot:

June 22nd – June 30th:

Mortgage-Backed Security UMBS 2.0 started the week around the 101.81 level and the UMBS 2.5 coupon started at the 103.80 level. The 10y Treasury yield was at the .72% level to start the week.

At the end of the week, Mortgage-Backed Security UMBS 2.0 was at the 102.30 level and the UMBS 2.5 coupon was nearing the 104.22 level. The 10y Treasury yield was at .65%

June 15th – June 19th:

Mortgage-Backed Security UMBS 2.0 started the week around the 101.91 level and the UMBS 2.5 coupon started at the 103.70 level. The 10y Treasury yield was at the .71% level to start the week.

At the end of the week, Mortgage-Backed Security UMBS 2.0 was at the 101.78 level and the UMBS 2.5 coupon was nearing the 103.78 level. The 10y Treasury yield was at .72%

June 8th – June 12th:

Mortgage-Backed Security UMBS 2.0 started the week around the 101.50 level and the UMBS 2.5 coupon started at the 103.50 level. The 10y Treasury yield was at the .90% level to start the week.

At the end of the week, Mortgage-Backed Security UMBS 2.0 was at the 101.91 level and the UMBS 2.5 coupon was nearing the 103.78 level. The 10y Treasury yield was at .72%

June 1st – June 5th:

Mortgage-Backed Security UMBS 2.0 started the week around the 101.70 level and the UMBS 2.5 coupon started at the 103.61 level. The 10y Treasury yield was at the .67% level to start the week.

At the end of the week, Mortgage-Backed Security UMBS 2.0 was at the 101.30 level and the UMBS 2.5 coupon was nearing the 103.38 level. The 10y Treasury yield was at .89%.