It's a quite day in the mortgage industry, bond market closes early along with most lenders. However there still are a few things cover as we wrap up 2019. On the last day of 2019 mortgage rates are stable as the bond market coasts into 2020. The Fannie Mae 3.0 coupon finished the year at 101.41, and the 3.5 coupon finished the year at 102.86.
Compared to last year these are excellent levels and in the case of the Fannie Mae 3.5 coupon it's finishing the year right at it's best level of 2019. The 10 year yield ended the year at 1.91% which is drastically lower than the 2.70% - 2.80% level back in December 2018.
Mortgage rates are hovering just above their 2019 lows!
Industry News:
So far this week we've had the Chicago PMI report, the Pending Home Sales report and today we had the Consumer Confidence report. Generally speaking mortgage rates were unfazed by the reports this week which was expected given the fact that we're between the Christmas holiday and New Years.
The Chicago PMI report came in at 48.9, and last month the reading was 46.3. While this months report was better than last months it's still somewhat of a disappointment that the report is showing contraction in the Midwest region. The Pending Home Sales report bounced back strongly. Last month we had a disappointing reading but this month showed a 1.2% increase in homes under contract.
Pending sales are up nearly 8% since this time last year.
The Consumer confidence report came in below expectations. Investors and analyst were expecting the report to came in at 128.2 however the report came in at 126.5.
On Friday there is the ISM Manufacturing report; this report in recent months has had an impact on the Mortgage Backed Securities market and consumer mortgage rates.
Employment Report:
Next week is big; it's Employment Report week. First up is the ADP employment report; analyst are expecting the report to show a positive gain of 150,000 jobs. Next up is the BLS employment report; analyst are expecting 165,000 non-farm payroll increase, wages to increase by 0.3 and the unemployment rate at 3.5%.
This report could really set the tone for mortgage application volume, especially refinance application volume, for Q1 2020. A strong report could push mortgage rates higher as we move into January however a weaker than expected report might just be enough to push mortgage rates lower.
Most of the time though; the Employment report is non-event in the short term and it's influence is usually felt in the proceeding weeks.
January 2020 Mortgage Rates:
Heading in to January we'd like to see continued stability in the Mortgage Backed Securities market. Simply put, when MBS is stable mortgage rates are better for consumers. 30 year fixed rates and 15 year fixed rate will most likely continue to be the predominate mortgage term for consumers. The industry is preparing in case mortgage rates do move to new lows in 2020. Back in the summer of 2018 many mortgage lenders were caught off guard by the surge in applications (from mortgage rates reaching multi-year lows) and processing times were significantly longer that usual. Moving into 2020 the industry is better prepared if something similar happens again.
Comments (0)Subscribe to CommentsComment