Today’s Mortgage Rates:
Mortgage rates remain near a two-year low as the huge rally in bonds continues this morning. At the open the 10y Treasury yield moved well below 2.40% (more on that below) as investors rushed in to buy bonds. Conforming and FHA fixed mortgage rates remain the most attractive terms available.
I mentioned yesterday to be cautious when it comes to thinking mortgage rates can continue to make big moves lower. These sorts of sharp moves down don’t happen often however when they do we usually see mortgage rates bounce higher (further explained later in today’s post).
If current mortgage rates make sense for your financial situation avoid the “let’s wait and see” approach. Waiting too long may end up costing you more in the long run.
Mortgage Rates - Conforming Loans
Mortgage Rates - FHA Loans
Mortgage Rates - Jumbo Loans
Mortgage Backed Securities and Treasury Snapshot:
Mortgage Backed Security FNMA 4.0 opened the day at 102.98, and FNMA 3.5 opened the day at 101.63. The 10y Treasury yield started the day at the 2.38% level. The Treasury market continues to outperform the Mortgage Backed Securities market.
The move down in the 10y treasury has been one of the biggest moves I’ve seen in the last 14 years. In a little over 4 months it’s moved from 3.25% to below 2.40% which ended up bringing mortgage rates down as well.
Treasury yields don’t set mortgage rates, Mortgage Backed Securities are where mortgage rates originate, however they do have a major influence over the direction they move.
Why Do Bonds Continue To Rally:
The main reason is investors fear the economy is slowing more than people expect which is good news for bonds. During times of economic growth stocks rally and bonds sell off. When the economy slows bonds rally and stocks go down. This is a very broad and general characterization.
Keep in mind investors are looking forward and they are investing their money based on where they think the economy will be in the future.
Will mortgage rates move down further?:
Current mortgage rates might move down further however it’s unlikely we’ll see significant moves lower from these levels. Even if the bond market continues to improve mortgage rates may level off at these levels for a while. The reason is that there will most likely be a surge in loan application volume and mortgage companies have little to no incentive to lower rate any more when application volume is at or above capacity.
Considering loan application volume has been weaker for nearly two years the surge to refinance might overwhelm some mortgage companies.
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Economic Data – This Week:
Today we have the Mortgage Market Index and on Thursday we have the final Q4 GDP reading and Pending Home Sales (February). To finish off the week we have the Personal Income report (February), Consumer Spending (January), Core PCE (January), Chicago PMI (March), Consumer Sentiment (March) and New Home Sales (February).
Mortgage Market Index:
This mornings data showed a significant increase in both refinance applications and purchase applications. The refinance index came in at 1289.5 (last week it was 1146.8) and the purchase index came in at 267.5 (last week it was 251.5). Overall the Mortgage Market Index reading is at 424.6.
The average 30 year fixed interest rate is at 4.45% (includes points). As you can see we are well below national average as we continue to deliver rates that are well below market averages.
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.
Loan Officer Kevin O’Connor:
Kevin grew up in California and works with clients throughout the state. From the initial quote to the application to the final closing; Kevin works directly with each and every homeowner and encourages his clients to ask questions so that they’re better informed. He updates koloans.com on daily basis and you can connect with him on social media: Twitter Rates01