Mortgage Update

Happy New Year! I hope everyone had a great holiday. 

The Mortgage Backed Securities market looked like it was going to start the day in negative territory however right at the open there was a quick reversal and bonds started to rally. Great way to start off 2020.  FNMA 3.5 coupon is at 102.92, and the FNMA coupon is at 101.52. The 10 year Treasury yield is at 1.88%.

Consumer residential mortgage rates are starting the year at great levels. Provided the Mortgage Backed Securities market remains stable we may see some improvement next week week as mortgage companies start to get back into a normal routine. Two of the most attractive terms right now are the 30 year fixed mortgage and the 15 year fixed mortgage.

Economic Calendar:

Not a lot on the calendar today; tomorrow and next week should be a bit more exciting. Today we had the weekly unemployment claims report. The report showed 222,000 claims were filed compared to 225,000 claims the previous week. Overall weekly claims have been on the low side. Tomorrow we have the ISM Manufaturing PMI (Dec) report. This is an important report for bond markets and consumer mortgage rates. The market is anticipating a 49.0 reading after last months reading of 48.1.

Next week is the ISM Non-Manufacturing report along with the ADP Employment and BLS Employment report. If these reports come in stronger than expected that could cause bond market volatility which would be bad for consumer mortgage rates. On the flip side; if these reports come in below expectations then that might help push mortgage rates lower as we move further into January.

Mortgage Rates January, 2020:

What will mortgage be like in January?

Great question with no easy answer. If the Phase One China trade deal and a Brexit conclusion are mostly baked into market then all eyes will be on these economic reports. For the most part, we're anticipating January, 2020 mortgage rates to be at similar levels to what was available in December, 2018. Fixed mortgage rates, such as the 30 year fixed rate mortgage, will probably continue to be more attractive than Adjustable Rate Mortgage terms.

We should start to see refinance and purchase applications pick up as home buyers and homeowners return to their regular daily activities. The good news is that processing times are really good right now so some refinance loan applications can close in as little as three weeks.

Mortgage Tip:

Are you looking to purchase a new home or refinance a mortgage? Then I highly suggest you review our key mortgage terms for a easier transaction. We cover just about everything a Loan Officer might say or email so that you can have a better understanding of what's going on with your loan application. Knowing the key mortgage terms will not only save you time but also money. It only takes 10-15 minutes to improve your mortgage vocabulary.

Have a great day and if you have any questions or would like a quote specific to your transaction please don't hesitate to reach out via our website or you can call me directly.