Mortgage rates are starting the day at their best levels of 2019. In fact these are the best levels in over a year as both the Mortgage Backed Securities market and the Treasury bond market start off the day in positive territory. For most of 2019 mortgage rates have been within a specific range along with Mortgage Backed Securities. This week mortgage rates have dipped slightly below that range after almost breaking the top end of that range a few weeks ago.
Mortgage Backed Securities and Treasury Snapshot:
Mortgage Backed Security Coupon FNMA 4.0 opened the day at 102.28 (or 102-09) and the 10y Treasury yield started the day at the 2.62% level. FNMA 4.0 still has to move higher to break out of the top end of the range (higher prices for FNMA 4.0 = lower mortgage rates) however the 10y yield is just at the bottom end of it’s range.
California Mortgage Rates (Conventional)
California FHA Mortgage Rates
Why Are Mortgage Rates So Low:
How is it mortgage rates are at their lows for 2019 if Mortgage Backed Securities are still within their range? Great question! When bonds rallied from November 2018 – January 2019 the move was fast and significant. When that happens lenders are a bit more cautious with the mortgage rates they issue when the market is volatile. Also the market had moved so significantly in such a short period of time that mortgage lenders knew it would not last (and they were right; eventually bonds sold off).
This recent move has been less significant in terms of the size of move and it’s not moving as fast. Because of that mortgage companies feel a bit more comfortable passing along improved mortgage rates to consumers.
Will Mortgage Rates Continue To Move Lower:
Difficult question to answer at this point. We’d like to see more of a positive move in bonds before saying we might see lower mortgage rates in the coming weeks. Right now the 10y yield is right at and at time right below the bottom part of its range and MBS FNMA 4.0 has yet to even reach the top end of its range let along break to new highs. So before we jump on the mortgage rates are going lower ship we’ll need to see some bigger moves in the bond market. What could trigger that? The next big “event” is the Fed meeting next week. If they came out with a super dovish stance that might be enough to spark a significant rally in bonds which could lead to lower mortgage rates.
Economic Data – This Week:
Today we have the weekly Unemployment Claims, Export and Import Prices and New Home Sales. Friday we have the Consumer Sentiment report along with the 1y and 5y Inflation Outlook.
Economic Data – Next Week:
On Monday we have the NAHB Housing Market Index for March. On Tuesday we have Factory orders (ex-transportation) for January and the start of the Fed meeting. Wednesday is the weekly Mortgage Market Index and the Fed decision. On Thursday we have the weekly Unemployment claims report along with the Philly Fed Business Index for March. to finish off the week we have Existing Home Sales and Wholesale Sales and Inventories.
The Fed meeting is the big event next week and all eyes are on what they have to say about the current economy, expectations going forward and their balance sheet reduction program.
Request A Low Rate Mortgage Quote:
JB Mortgage Capital, Inc.:
We offer industry low mortgage rates for both refinance and purchase transactions, personal one-on-one service and we have an A+ rating with the Better Business Bureau (BBB). We also have a top rating with the Business Consumers Alliance (AAA). We utilize the latest technology to ensure a fast closing and Loan Officer Kevin O’Connor has over 14 years of experience as a mortgage professional. When it comes to mortgage rates please keep in mind that mortgage rates adjust daily; sometimes they adjust multiple times in a day when the bond market is volatile. Also things like obtaining cash out, lower credit scores, higher Loan-To-Value ratios, rental properties and the subordination of a second mortgage will cause in an increase in your mortgage rate. To obtain the most up-to-date quote, specific to your loan scenario be sure to contact Loan Officer Kevin O’Connor at 1-800-550-5538 or you can submit a “Contact Us” request on the our website.