To start the month, March 2020 mortgage rates in California are near all-time lows as the bond market rallies over worries that the economy will be significantly impacted by the continued spread of the Coronavirus.
Bad economic news is good news for bond markets and more importantly consumer mortgage rates. There are risks so we suggest clients lock in case there is a market disruption.
This is for Conventional, Jumbo, and FHA fixed mortgage rates for refinancing a current mortgage and for the purchase of a home. If you would like a quote specific to your transaction please be sure to contact me directly (you can use the contact form below or call my direct number: 1-800-550-5538). I have over 15 years of experience providing low rates, fast closings, and exceptional service.
Opportunities And Risks For March 2020 Mortgage Rates
This is one of the best opportunities ever to lock in a low mortgage rate.
Whether it’s a 30-year fixed-rate, a 20-year fixed-rate, or a 15-year fixed-rate now is the time to take advantage of market conditions. March 2020 mortgage rates will remain low provided the market still fears what might happen with the Coronavirus.
And that leads us to the risks for March 2020 mortgage rates.
While the economic data has been a bit weak recently it definitely does not warrant a 10% move lower in stocks and all-time low yields in the Treasury market. So once things start to stabilize with the Coronavirus or once investors feel like it’s not going to be as bad as expected then things will reverse for bond markets and more specifically for mortgage rates.
It’s a huge risk and one that every homeowner should take seriously.
Important Update For March 2020 Mortgage Rates
The mortgage industry is experiencing an unprecedented wave of refinance applications due to the low mortgage rates from early March.
Starting on March 6th you started to see some lenders (competitors of ours) significantly raise rates to slow the flow of applications. That continued into the following week and many homeowners saw the rate tables on websites like BankRate, Zillow and NerdWallet advertize 30 year fixed mortgage rates in the 4% to above 5% range when they were just below 3.5% a few days before.
Why did this happen?
Too many applications at once and these mortgage lenders are significantly above the amount of loan volume they can handle. The good news for our clients is that our network of lenders have done a much better job of managing the current influx of applications and we are still aggressively priced compared to the rest of the market.
It would not be surprising to see mortgage rates rise in the near-term as lenders try to process these applications and the bond market adjusts to news updates about the Coronavirus.
March 2020 Mortgage Rate Average
We’ll update this section as we move further into March however to start of the month we’re seeing the following averages.
- The average 30-year fixed-rate mortgage in California is 3.375%.
- The average 20-year fixed-rate mortgage is below 3.25%.
- The average 15-year fixed-rate in California is 3.125%.
This is an average of everyone we’re seeing; from less than perfect credit to excellent credit.
These near all-time low mortgage rate averages are responding to a bond market that seems to be in permanent rally mode. However, don’t be fooled into thinking this will go on for an extended period of time.
At some point, the rally will reverse and that could put significant pressure on mortgage rates to move higher.
March 2020 Mortgage Rate Forecast For California
March 2020 mortgage rate forecasts in California are as follows:
- 30-year fixed-rates below 3.50%
- 20-year fixed-rates below 3.375%
- 15-year fixed-rates below 3.125%
This is based on a loan amount of $350,000, primary home, excellent credit (740 or higher credit score), and a Loan-To-Value ratio below 75%.
And it’s based on continued market concern over the Coronavirus. If the market decides the risk isn’t there or that the risk associated with the market is fully priced in then the mortgage rate forecast for March 2020 will go higher.
March 2020 Mortgage Rate Chart
Here is a quick reference guide to March 2020 mortgage rate possibilities (these are not quotes) and the payments associated with each level based on various loan amounts. See our important disclosure below.
Mortgage Rate Chart – 30-Year Fixed-Rate Mortgage:
|Term||Loan Amount||Mortgage Rate||Payment|
Mortgage Rate Chart – 20-Year Fixed-Rate Mortgage:
|Term||Loan Amount||Mortgage Rate||Payment|
Mortgage Rate Chart – 15-Year Fixed-Rate Mortgage:
|Term||Loan Amount||Mortgage Rate||Payment|
Important Disclosure: The above is not a 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.
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!
The Coronavirus and Mortgage Rates
There is no question that the daily news cycle of the Coronavirus is causing mortgage rates to inch lower. This move is unprecedented and is something I’ve not seen in my 15+ year career as a Loan Officer.
That being said; it’s super important you remain cautious with waiting to see if mortgage rates move lower. The more likely scenario is that they level off or move significantly higher.
The Coronavirus Press Conference:
On February 26th President Trump, along with Vice President Pence, held a press conference to try and show the markets and the American public that they have everything under control when it comes to the Coronavirus.
The next day the stock market tanked over 4% and the 10y yield moved to record lows.
The press conference about the Coronavirus did not have the desired impact they were hoping for and that has helped mortgage rates (somewhat). As I’ve mentioned in this post and several other posts; mortgage rates are not moving significantly lower despite the massive rally in the Treasury market.
A simple look at any one of the Mortgage-Backed Securities charts will show you why mortgage rates are not lower. Back in early 2016, FNMA 3.0 was above 105.00; back in 2012, it was above 106. Heading into March it was at 103.39.
MBS has a long way to go before we’ll start seeing mortgage rates move significantly lower.
What Is The Fed Lowers Rates Will Mortgage Rates Go Lower?
Probably not but until that happens we can’t say for sure. The reason why they probably won’t go lower is simple:
- The Fed does not control mortgage rates
- A possible Fed move is a reaction to the current market movements. That means the market has already moved prior to any possible Fed action.
- The market is forward-thinking so after the Fed acts the most likely scenario is bonds sell off and mortgage rates move higher on the perceived notion that things will get better. An improving economic situation is bad for bonds and consumer mortgage rates.
There are many times where the Fed went one way and mortgage rates went in the opposite direction. Just look at December 2018.
The Fed lowered and post-meeting mortgage rates moved lower (for months).
Mortgage Rate FAQ’s
Here we answer some popular questions about mortgage rates in California.
Why Are Mortgage Rates So Low?
Mostly because of the fear over the Coronavirus having an impact on the global economy. Part of the reason why mortgage rates are low is that the economic data has not been that great recently.
It’s important to keep in mind that mortgage rates won’t continue to move lower; at some point they will reverse and move higher (possibly much higher). It’s important you discuss your mortgage rate options and a plan to lock with your Loan Officer.
Is A 3.50% A Good 30 Year Fixed Mortgage Rate?
Absolutely and you should not hesitate to lock in a 30 year fixed rate at or below 3.50%. Back in October/November 2018 30 year fixed mortgage rates were above 5.00%. Avoid comparing your rate quote to your neighbor (or anyone else) unless you know specifically their situation and the exact cost of the rate. When consumers talk about the rate they got they rarely understand the exact cost of the rate they closed at.
For example – a 3.50% rate with minimal cost is better than a 3.25% with $6,000 in closing cost.
What Are The Current Mortgage Rates In California?
We update our current mortgage rates in California daily. Be sure to check back on this page for most up-to-date mortgage rate information for Conventional, FHA and Jumbo mortgage loan programs.
Our mortgage rates are good for both the refinance of a current mortgage and for the purchase of a home.
If you would like a quote for your specific transaction please contact me directly at 1-800-550-5538 (or you can send an online request).
Who Is The Best Mortage Broker In California?
Finding the best mortgage broker in California requires some research. Here is what you want to look for:
- A mortgage broker with an A+ rating with the Better Business Bureau.
- A top rating with either Zillow or Yelp.
- A Loan Officer with at least five years of experience.
Find two or three mortgage brokers that match this and you will be in a better position to locking in a low rate at great terms.
One suggestion; make sure you work with a Loan Officer that is willing to take the time to answer your questions. It’s an important benefit that only the best mortgage brokers in California provide.
What Is The Best Mortgage Rate In March?
The best mortgage rate in March is different for everyone. That’s because everyone’s situation is different and there are a wide variety of loan programs with different rate options.
The best 30 year fixed mortgage rate in March for someone with excellent credit is going to be different than someone who has less than perfect credit. Then there are differences between terms (ie 30 year and 15 year fixed rates).
Working with top-rated mortgage brokers will help you find the best mortgage rate that matches your situation.
Economic Calendar For March 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 March 2020 mortgage rates.
To start things off we have:
For the last two to three weeks the market has been focused on the Coronavirus. These reports might be enough to put the economy back in focus. Strong reports could push mortgage rates higher.
Tuesday – March 31st:
- Chicago PMI: Last month the report came in at 49.0 and this month it came in at 47.8.
- Consumer Confidence: Expectations were for a reading of 110.00 however the final reading came in at 120.0.
Friday – March 27th:
- Core PCE: Expectations were for a 1.7% increase and the reading came in at 1.8%.
- Personal Income: Personal income rose 0.6% (vs last months .06% increase)
- Consumer Inflation Expectations: Both the 1y and 5y Consumer Inflation reading came in at 2.2%.
- Consumer Sentiment: Consumer Sentiment moved from 95.9 last month to 89.1 this month.
Thursday – March 26th:
- Weekly Jobless Claims: Expectations were for 1 million claims however the report came in significantly higher than that; just under 3.3 million claims. This is a record. To put it in perspective; in 2008 the US economy lost 3.5 million jobs….over 52 weeks. In one week we lost 3.3 million.
Wednesday – March 25th:
- Mortgage Market Index: As expected the Mortgage Market Index dropped compared to last week (758.4 vs 1073.6). This is exactly what the industry needs to see for an extended period as lenders work through all the applications they’ve received in the previous four weeks.
- Durable Goods: Last month the reading decreased by -0.2% and to the surprise of many the most recent report showed an increase of +1.2%. No one expects to see a positive number next month.
Tuesday – March 24th:
- PMI-Composite (Markit): Not surprisingly this report came in well below last months level (39.1 vs 49.4)
- New Home Sales: Last month the report showed a 7.9% increase; this month’s report showed a decline of -4.4%.
Thursday – March 19th:
- Philly Fed Business Index: Last month it came in at +36.7; this month it tanked to -12.7. We expect next month’s report to show further declines.
- Weekly Jobless Claims: Claims increased from 220,000 (prior week) to 287,000. Over the next few weeks, we should see dramatic increases to the weekly claims number.
Wednesday – March 18th:
- Mortgage Market Index: The Mortgage Market Index decreased from 1172.1 to 1073.6 and the average 30 year fixed rate jumped from 3.47% to 3.74%. As I’ve mentioned; mortgage lenders have been overwhelmed with applications and because of that mortgage rates moved higher (other reasons as well contributed to the rise in rates). The best thing for mortgage rates moving forward is to see the index drop back down below 800 which may happen in the next few weeks.
- Housing Starts: The Housing Starts number came in at 1,599,000 units (annual run rate).
Tuesday – March 17th:
- Retail Sales For February: Retail Sales for February declined -0.5% (last month it increased by 0.3%). This was not surprising to see and the report had no impact on the market (due to the concerns about the COVID-19).
Friday – March 13th:
- Import and Export Prices: There was a collapse in both import and export prices. Import prices came in with a decline of -0.5% and export prices declined -1.1%.
- 5y and 1y Inflation Outlook: Expectations for the 5y outlook ate 2.3% and for the 1y outlook it’s 2.4%
- Consumer Sentiment: Last month it came in at 101.0 and expectations are for a lower number this month (95.0
Thursday – March 12th:
- Core Producer Prices: A surprise decline of -0.3% (Month/Month) after last months 0.1% gain. The annual reading came in lower as well (1.4% vs 1.7%)
- Weekly Jobless Claims: 211,000 people filled claims; expect this number to jump significantly higher over the next two to four weeks.
Wednesday – March 11th:
- Mortgage Market Index: This weeks number is up significantly. Last week it came in at 754.1, this week it’s at 1172.1 which is one of the biggest increases I have ever seen. The reason? refinance applications skyrocketed. With the dip in mortgage rates, there was a significant rush of new refinance applications.
- Consumer Price Index (CPI): The Core CPI report came in higher than expected (2.4% vs 2.3%). During “normal” times this report can move the market when it comes in higher than expected however we are definitely not in normal times so the market ignored the report for the most part.
Friday – March 6th:
- BLS Employment Report: A good report last month (206,000 jobs created); will this report be just as solid? Even if it is solid it is unlikely to impact the market much unless the focus has moved away from the Coronavirus. A huge beat as the number of jobs created was 273,000. Also, wages increased as expected (0.3%) and the unemployment rate dipped to 3.5% (from 3.6%).
Thursday – March 5th:
- Weekly Unemployment Claims: Other than a few weeks here and there; unemployment claims have been well below 250,000 for a long time. Over the next few weeks, and months, this number will rise above 250,000 if the Coronavirus impact is still being felt in the economy. Definitely a report to watch in March. The report had 216,000 claims.
Wednesday – March 4th:
- Weekly Mortgage Market Index: Last week the Mortgage Market Index came in higher than the previous week (655 vs 645.5). The increase was a result of the purchase component as refinance applications declined. There was a big jump this morning from the 655.0 last week to 754.1. Mostly fueled by refinance applications.
- ISM Non-Manufacturing PMI: Last month the report came in at 55.5 and that is what the market is expecting. This report came in higher than what the market was forecasting. The reading of 57.3 was also an increase from last month’s report.
- ADP National Employment Report: A huge report last month (291,000 jobs created). Will it repeat? The ADP report usually does not impact the market much since the BLS Employment report is just a few days away. The report issued showed 183,000 jobs created. Above expectations but below last month’s reading of 291,000 jobs created. This report had no impact on March 2020 mortgage rates.
Monday – March 2nd:
- ISM Manufacturing PMI: Last month it came in at 50.9 and the market is expecting a reading of 50.5. The report came in below expectations at 50.1. This is another report showing weakness in the economy before the Coronavirus has a significant impact on the economy.
February’s Job Report And Mortgage Rates
Last month’s Job’s report was good. 206,000 jobs created, 3.6% unemployment rate and earnings rose 0.2%. Under most circumstances, the bond market would have probably sold off and mortgage rates would have moved higher.
But that’s not what happened. The 10y yield moved from 1.64% to below 1.60% and mortgage rates improved over the next few weeks.
As we wait on the February 2020 numbers it’s important to remember that we’re currently near all-time lows so it’s unlikely even a weak report will help improve consumer mortgage rates.
We all know about Super Tuesday when it comes to the US Presidential Nomination process but have you heard about Super Tuesday for the bond market?
Probably not but we had one.
On Tuesday, March 3rd, 2020 the 10y yield dropped to the lowest level in history. The record low yield that day was 0.906 due to the massive rally in the bond market. It was a historical moment and one that might not be repeated.
Fed Meeting March 17 – 18
The Fed’s first meeting was in January (28th and 29th) and the Fed’s second meeting of 2020 will be March 17th and 18th. It would not be surprising to see many people calling for the Fed to cut rates. Even if they do I would not expect mortgage rates to move lower.
The Fed does not control mortgage rates and the market typically moves prior to Fed action.
Emergency Fed Action – March 15th
On Sunday, March 15th, 2020 the Fed made a dramatic moved and cut the Fed rate to 0.00 and announced an aggressive bond-buying program.
Did mortgage rates move to 0.00%?
No, they did not more to zero percent. For many lenders, mortgage rates actually moved higher after the Fed announcement. The Fed does not control mortgage rates and they do not set mortgage rates. Fed action will help reduce credit card interest rates and car loan interest rates along with Home Equity Lines of Credit (HELOC).
The asset purchase program they announced will help bring stability to the Mortgage-Backed Securities market (which is where mortgage rates originate) and this is a positive for mortgage rates moving forward.
Mortgage-Backed Securities & Treasury Snapshot
Let me introduce you to UMBS. What is UMBS? It’s the combination of Fannie Mae and Freddie Mac MBS. UMBS stands for:
Uniform Mortgage-Backed Securities. Moving forward we will now show UMBS.
March 23rd – March 31st:
Mortgage-Backed Security UMBS 3.0 started the week around the 103.44 level and the UMBS 3.5 coupon started at the 103.91 level. The 10y Treasury yield was at the .815% level to start the week.
To close out the month, Mortgage-Backed Security UMBS 3.0 was at the 104.90 level and the UMBS 3.5 coupon was at the 105.60 level. The 10y Treasury yield was just below .70%.
March 16th – March 20th:
Mortgage-Backed Security UMBS 3.0 started the week around the 102.86 level and the UMBS 3.5 coupon started at the 103.19 level. The 10y Treasury yield was at the .778% level to start the week.
At the end of the week, Mortgage-Backed Security UMBS 3.0 was at the 102.36 level and the UMBS 3.5 coupon was at the 102.88 level. The 10y Treasury yield was at .880%.
March 9th – March 13th:
Mortgage-Backed Security UMBS 3.0 started the week around the 103.06 level and the UMBS 3.5 coupon started at the 103.20 level. The 10y Treasury yield was at the .669% level to start the week.
At the end of the week, Mortgage-Backed Security UMBS 3.0 was at the 101.78 level and the UMBS 3.5 coupon was at the 104.13 level. The 10y Treasury yield was at .983%.
March 2nd – March 6th:
Mortgage-Backed Security UMBS 3.0 started the week around the 102.95 level and the UMBS 3.5 coupon started at the 103.97 level. The 10y Treasury yield was at the 1.08% level to start the week.
At the end of the week, Mortgage-Backed Security UMBS 3.0 was at the 103.09 level and the UMBS 3.5 coupon was at the 102.86 level. The 10y Treasury yield was at .773%.