Mortgage Rate Recap and Outlook for the Week Ending November 29, 2019


Piggybacking on low mortgage rates, the refinance applications are on a rise. Refinance volume has pushed total mortgage volume up and it is nearly 150% above where it was, this week last year. The data, however, is not as reliable given that Thanksgiving fell a week earlier last year. To add, 30-Y fixed has come down by 1.15% over this one year period, boosting the present mortgage volume, and hence further skewing the Year-over-Year data. Be that as it may, there is certainly a cause for cheer.

Mortgage Rates: rates decrease across the
platform

This week’s Mortgage Banking
Associations’
 (MBA) weekly rate survey reveals a decrease
in mortgage rate across the board.

According
to the MBA Weekly Survey: “
The average
contract interest rate for 30-year fixed-rate mortgages with conforming loan
balances ($484,350 or less) decreased to 3.97 percent from 3.99 percent, with
points decreasing to 0.30 from 0.33 (including the origination fee) for 80
percent loan-to-value ratio (LTV) loans. The effective rate decreased from last
week.”

1
point in cost = 1% of the loan amount

“The average contract interest rate for 30-year
fixed-rate mortgages with jumbo loan balances (greater than $484,350) decreased
to 3.87 percent from 3.93 percent, with points increasing to 0.29 from 0.28
(including the origination fee) for 80 percent LTV loans. The effective rate
decreased from last week.”

“The average contract interest rate for 15-year
fixed-rate mortgages decreased to 3.38 percent from 3.40 percent, with points
decreasing to 0.27 from 0.31 (including the origination fee) for 80 percent LTV
loans. The effective rate decreased from last week.” 

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“The average contract interest rate for 5/1 ARMs
decreased to 3.42 percent from 3.51 percent, with points decreasing to 0.22
from 0.23 (including the origination fee) for 80 percent LTV loans. The
effective rate decreased from last week.”

Mortgage Rate Activity and Predictions

The Bankrate’s weekly survey
of mortgage and economic experts, countrywide, reveals that there are
no takers for a rate hike for the coming week (27th November to 4th December).

Out
of those surveyed, 33% experts feel we are headed for a rate decline and 67%
feel there will be no change (with a maximum movement of two basis points
either side).

Freddie Mac’s weekly mortgage survey has reported that the conforming rates for the week- 21st November to 27th November- have shot up by 0.02% for 30 Y Fixed and has remained unchanged for 15 Y Fixed.

Freddie
Mac’s weekly mortgage survey noted, “Following a decline in the first nine months of 2019,
mortgage rates have traded narrower during the last two months with a modest
drift upward due to an improved economic outlook. While there has been a lag in
the housing market’s response to lower rates, real estate volumes have clearly
shifted into a higher gear. Moreover, the recent improvement in the cyclical
segments of the economy and easing financial conditions will provide a gentle
tailwind to the real estate market rebound over the next few months.”

Mortgage Rate Lock Advice

I would recommend you to Lock if you are closing within
the next 3 weeks and Float if you are closing any time beyond.