Mortgage interest Rates october to november

brutepunk

New member
Hi all, any idea what to expect for mortgage interest rates in oct and nov, moving up or down, should we lock in rates or wait to drop
 
This is like trying to predict the temperature a month from now.  We can make some good guesses, but the weather will do what it wants.

My opinion is that a few things point to higher rates in the near future:

-The Fed is expected to increase the Fed funds rate in December (84% consensus on Wall Street).
-The Fed is supposed to start unwinding QE this month by selling Treasuries and mortgage securities off its balance sheet.
-The European central banks are expected to begin unwinding their QE and sell assets off their balance sheets.
-Further good economic news is expected under the Trump presidency, at least in the short term.  This is inflationary in nature.
-Trump may appoint a more hawkish Fed chairman than Janet Yellen, which means expectations for rate increases could increase.

My advice would be to lock ASAP. 

The 10 year Treasury has gone up 0.39% in the past 6 weeks and the trend is still positive in direction.  Mortgage rates take their cue from this and have already increased 0.125% this week.

Signed,
A long time mortgage professional
 
Some wisdom above from Liar Loan.

About this time last year there was an assumption that the "coronation" of a certain political candidate was in the bag. The mortgage market had pricing itself accordingly because as many knew that there was zero chance of anything disrupting the "status quo".

The morning of 11/8/2016 turned out to be quite a different picture from what was assumed and rates turned in a wildly opposite direction.

See chart about 1/2 down the page.

http://www.freddiemac.com/pmms/

So many things happen in the market that if anyone says they know where things are headed, you know at that very moment to stop listening. We see the trends, and if you've found that rate watching is keeping you up at night, limit the impact of the trend and lock. If you expect to see market disruption - as we did a year ago - then play the odds.

My .02c
 
The recent data is higher rates:https://tradingeconomics.com/united-states/mortgage-rate

There's some seasonality to the yield curve steepening in September and January though.

Yellen is going to hike fed funds again in December. Probability very high based on market expectations via fed funds futures contracts.

If the economy started weakening all of a sudden, rates on the long end would pull back down a bit, but there's still no signs of recession at the moment. Unemployment is ticking up higher in some areas like Orange County and San Francisco County, but nationally the average is still very low.

If Trump fails to pass tax reform that could have long end rates pullback a bit but so far that seems to be humming along. Still, to assign a probability to that outcome is futile.

A lot of the guys who made their billions in the bond market are calling for higher rates and that the 30 year bond bull market is over.

End of day, 4% is still ridiculously low. My concern would not be rates, but elevated asset prices and a potential recession. We're on year 8 of expansion, the longest in history has been 10. Is this really the best time to buy would be my concern. But if you're starting a family, producing some children, I guess you have to buy regardless of price.
 
brutepunk said:
Hi all, any idea what to expect for mortgage interest rates in oct and nov, moving up or down, should we lock in rates or wait to drop

From everything I hear and read, it looks like its going to be moving up.
 
I recently signed a contract for new construction that will be built in April. Should i lock in the rate now for a 6 month? or wait till April? what are the pros and cons of locking now vs in April. Can someone please educate me on this?  do you have to pay points for a lock now?
 
Irvine_is_awesome said:
I recently signed a contract for new construction that will be built in April. Should i lock in the rate now for a 6 month? or wait till April? what are the pros and cons of locking now vs in April. Can someone please educate me on this?  do you have to pay points for a lock now?

WAIT!
 
Irvine_is_awesome said:
I recently signed a contract for new construction that will be built in April. Should i lock in the rate now for a 6 month? or wait till April? what are the pros and cons of locking now vs in April. Can someone please educate me on this?  do you have to pay points for a lock now?

The world is ending. I would lock. Don?t pay for a lock though and get a float down option.
 
What are people being quoted on new purchase jumbo loans? I?m being quoted 4.0% on purchase jumbo with a small .25% credit to offset closing costs. I can get this down with relationship pricing, but feel like banks aren?t very aggressive right now. I was quoted much better rates before even though overall market hasn?t changed a lot. This is for just a bit below 80% Ltv 30 yr fixed.

Anyone doing much better than 4.0%?
 
i1 said:
What are people being quoted on new purchase jumbo loans? I?m being quoted 4.0% on purchase jumbo with a small .25% credit to offset closing costs. I can get this down with relationship pricing, but feel like banks aren?t very aggressive right now. I was quoted much better rates before even though overall market hasn?t changed a lot. This is for just a bit below 80% Ltv 30 yr fixed.

Anyone doing much better than 4.0%?

Not sure about 30yr but I?ve been getting 5/1 arm quotes between 2.75-2.875 and 7/1 arm quotes between 3-3.25.  120-180 day locks with no points and no cost.  Relationship pricing is another .125-.25 lower depending on $$.
 
A few things that impact your eventual mortgage rate:

A) "Real FICOS" - not CreditKarma or AMEX / Discover sourced scores. A 759 score will have about a .25 to .375 fee difference from a 760 score. Sometimes that translates into .125 in rate. If you go into contract believing CreditKarma's 790 score, once your lender finds a 725 score on their report (as what happened to a recent client....) then expect a rate rise of significance.

B) Property Type - SFR vs Condo vs Units

C) Loan size - A $424,100 loan will have a higher rate than a $1,000,000 loan due to Agency delivery fees.

D) Length of Lock - 30/45 day pricing is better than 60/90/75/120 day pricing.

E) "Fee free" requests. Most lenders have $1,000 to $2,000 in loan fees that borrowers don't like paying. Lenders needing to "bury" $1,500 in fees have to raise the rate by .125% to do so.

F) For new construction, "builder credits for using their lender" come at the cost of the rate. Example: You could get 3.50 without a credit in the general market, or 3.750 with the builder credit. The rate differential is one way to obtain funds to "give" to you.

My .002c

Soylent Green Is People
 
Soylent Green Is People said:
E) "Fee free" requests. Most lenders have $1,000 to $2,000 in loan fees that borrowers don't like paying. Lenders needing to "bury" $1,500 in fees have to raise the rate by .125% to do so.

Fair point.  That's why I like to get my quotes with the full fees.  Then I can just negotiate the fees or in some case both. 
 
i1 said:
What are people being quoted on new purchase jumbo loans? I?m being quoted 4.0% on purchase jumbo with a small .25% credit to offset closing costs. I can get this down with relationship pricing, but feel like banks aren?t very aggressive right now. I was quoted much better rates before even though overall market hasn?t changed a lot. This is for just a bit below 80% Ltv 30 yr fixed.

Anyone doing much better than 4.0%?

Seems quite high but I don't know the specifics of your situation.
 
The 10 year treasury spiked up 3% today to an 8-week high.  I hope y'all locked your rates when the getting was good.
 
Liar Loan said:
The 10 year treasury spiked up 3% today to an 8-week high.  I hope y'all locked your rates when the getting was good.

3% on the 10 year bond?  I see 2.46%...did you mean on the 30 year bond?
 
It increased by 7 bps so the percentage increase was 3%.  I knew this would probably be confusing after I posted it, but I didn't mean to say that it increased by 300 bps.
 
Liar Loan said:
It increased by 7 bps so the percentage increase was 3%.  I knew this would probably be confusing after I posted it, but I didn't mean to say that it increased by 300 bps.

My bad, didn't not clearly read your post.  I think the 10-year might be heading back up to the 52-week high of 2.60ish in the near term.
 
May also be year end window dressing for some of the fund managers. Dump bonds in Dec, then jump back come January.

My .02c

SGIP
 
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