Renting

Apache is functioning normally

First-time home buyers worrying about housing affordability face two obstacles: high home prices and high mortgage rates.

Home prices have continued to rise in over 85% of U.S. cities, and according to a recent Redfin report, a homebuyer must earn $115,000 to afford a typical home, which is $40,000 more than the average American household earns.

One way for this gap to correct is for mortgage rates to go down, but this is something that Bank of America Corp. (NYSE:BAC) CEO Brian Moynihan does not foresee anytime soon.

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Compared to historical mortgage rates today’s rates might not be so bad, Moynihan said. People likely will get used to mortgage rates of 6% to 7%, given that mortgage rates were over 18% in the 1980s during the Federal Reserve’s inflation-fighting efforts, he told CNBC.

Given this backdrop, Moynihan argues that today’s mortgage rates are more normal than during the unorthodox rate policy in the 15 years after the Great Financial Crisis, saying, “For 15 years, we had no real rate structure, you know, rate structure in the United States and around the world.”

For consumers hoping to catch a break with lower mortgage rates, Goldman Sachs signals caution as well.

Trending: This startup is accepting investors for as little as 25 cents – what’s the catch?

It extended its first expected rate cut past the Fed’s May meeting after Federal Reserve policymakers have pushed back on the market’s expectation of rate cuts this year, citing a need to see more consistent evidence of inflation stabilizing around the 2% target.

However, lower mortgage rates influenced by future Fed cuts aren’t the only way buyers can hope for a lower rate.

U.S. consumers have been able to afford homes by purchasing newly built houses from home builders that have been willing to buy down buyers’ mortgage rates to allow them to afford them. Homebuilders cannot wait for the Fed to lower rates to continue their business in the same way an individual homebuyer might be more willing to wait.

About 75% of homebuilders are offering mortgage rates lower than a homebuyer could get from a traditional financial institution, according to John Burns Research & Consulting. Whether the trend of homebuilders aggressively buying down mortgage rates to encourage home sales is set to continue is up for debate, but one big investor has shaken up his portfolio regarding homebuilder stocks.

Warren Buffett’s Berkshire Hathaway Inc. has recently been optimistic about the prospects of U.S. homebuilders, disclosing its stake in three major companies in the second quarter of 2023: D.R. Horton Inc. (NYSE:DHI), NVR Inc. (NYSE:NVR) and Lennar Corp. (NYSE:LEN).

However, Buffett switched course quickly on D.R. Horton, which was once his largest homebuilder stock. In the fourth quarter last year, Berkshire Hathaway announced it sold out of D.R. Horton while keeping both NVR and Lennar.

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This article 7% Mortgage Rates Are Here To Stay, Bank of America’s CEO Warns As Warren Buffett Sells Out Of This Homebuilder Stock originally appeared on Benzinga.com

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Source: finance.yahoo.com

Apache is functioning normally

With the market for existing homes struggling amid a lack of inventory, New Home Sales continue doing the heavy lifting for the housing market.  Rather, New Home Sales are doing more to show a stronger relative performance to the pre-pandemic years.  The market for existing homes is still far bigger, even at its weakest levels.

But existing home sales data is so “last week.”  Today’s release is specific to new homes, so let’s zoom in.  When we do, we can see new home sales remaining in the 2017-2019 range for nearly two years now.  

In other words, new residential sales continue chugging along without much fanfare since the initial supply glut and demand surge that followed covid-related lockdowns. 

There was quite a bit of variation depending on geography, which is often a result of ebbs and flows of weather events at this time of year.  Here’s how the chips fell in January by region:

  • The Western region saw a huge 38.7% increase, moving from the lowest levels in 10 months to the highest levels in more than a year
  • The Northeast saw and even larger 72% increase, but that’s not saying as much given the vastly smaller unit count in that region
  • The Midwest ticked up 7.7% month over month but remained well under July’s peak
  • The South decreased by 15.6%  to the lowest levels in more than a year, but only slightly below November

Source: mortgagenewsdaily.com

Apache is functioning normally

National mortgage rates rose for all types of loans compared to a week ago, according to data compiled by Bankrate. Rates for 30-year fixed, 15-year fixed, 5/1 ARMs and jumbo loans jumped.

While it’s expected that rates will gradually come down this year, the path might be bumpy.

“Mortgage rates will be bouncy week-to-week but will most likely settle towards 6 percent by the year end,” said Lawrence Yun, chief economist for the National Association of Realtors.

At its Jan. 31 meeting, the Federal Reserve announced it would hold off changing rates and affirmed its plan to slash rates this year. Rate changes affect many areas of the economy, including the 10-year Treasury, a key benchmark for fixed-rate mortgages.

“The 10-year Treasury yield that serves as a baseline for fixed mortgage rates will have a bouncy journey lower, moving back above 4 percent early in 2024 but trending lower as inflation cools and the Fed gets closer to cutting rates,” says Greg McBride, CFA, Bankrate chief financial analyst. “For mortgage rates, that portends a general downtrend — albeit with fits and starts — in 2024.”

Rates last updated February 27, 2024.

The rates listed above are Bankrate’s overnight average rates and are based on the assumptions indicated here. Actual rates listed across the site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Tuesday, February 27th, 2024 at 7:30 a.m.

30-year mortgage rate trends higher, +0.05%

Today’s average rate for the benchmark 30-year fixed mortgage is 7.34 percent, up 5 basis points since the same time last week. A month ago, the average rate on a 30-year fixed mortgage was lower, at 6.96 percent.

At the current average rate, you’ll pay a combined $688.29 per month in principal and interest for every $100,000 you borrow. That’s $3.40 higher compared with last week.

15-year fixed mortgage rate moves upward, +0.14%

The average 15-year fixed-mortgage rate is 6.76 percent, up 14 basis points from a week ago.

Monthly payments on a 15-year fixed mortgage at that rate will cost $885 per $100,000 borrowed. The bigger payment may be a little more difficult to find room for in your monthly budget than a 30-year mortgage payment, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much faster.

5/1 ARM rate climbs, +0.04%

The average rate on a 5/1 ARM is 6.19 percent, adding 4 basis points over the last 7 days.

Adjustable-rate mortgages, or ARMs, are mortgage terms that come with a floating interest rate. In other words, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These loan types are best for people who expect to refinance or sell before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.

While borrowers shunned ARMs during the pandemic days of super-low rates, this type of loan has made a comeback as mortgage rates have risen.

Monthly payments on a 5/1 ARM at 6.19 percent would cost about $612 for each $100,000 borrowed over the initial five years, but could climb hundreds of dollars higher afterward, depending on the loan’s terms.

Jumbo mortgage rate moves higher, +0.03%

The average rate you’ll pay for a jumbo mortgage is 7.38 percent, up 3 basis points over the last seven days. Last month on the 27th, the average rate was lesser at 7.00 percent.

At the current average rate, you’ll pay $691.02 per month in principal and interest for every $100,000 you borrow. That’s up $2.05 from what it would have been last week.

Mortgage refinance rates

Today’s 30-year mortgage refinance rate retreats, -0.07%

The average 30-year fixed-refinance rate is 7.24 percent, down 7 basis points from a week ago. A month ago, the average rate on a 30-year fixed refinance was lower at 7.16 percent.

At the current average rate, you’ll pay $681.50 per month in principal and interest for every $100,000 you borrow. That represents a decline of $4.75 over what it would have been last week.

Where are mortgage rates heading?

With inflation still above the Fed’s 2 percent goal and the job market holding strong, the Fed isn’t likely to cut rates at its March meeting.

“The Federal Reserve will not cut interest rates in the first half of this year, in my view,” says Yun, “but rate cuts of three, four or even five rounds will be possible in the second half of the year as rent measures will be much more well-behaved.”

The rates on 30-year mortgages mostly follow the 10-year Treasury, which shifts continuously as economic conditions dictate, while the cost of variable-rate home loans mirror the Fed’s moves.

These broader factors influence overall rate movement. As a borrower, you could be quoted a higher or lower rate compared to the trend.

What current rates mean for you and your mortgage

While mortgage rates change daily, it’s unlikely we’ll see rates back at 3 percent anytime soon. If you’re shopping for a mortgage now, it might be wise to lock your rate when you find an affordable loan. If your house-hunt is taking longer than anticipated, revisit your budget so you’ll know exactly how much house you can afford at prevailing market rates.

Keep in mind: You could save thousands over the life of your mortgage by getting at least three loan offers, according to Freddie Mac research. You don’t have to stick with your bank or credit union, either. There are many types of mortgage lenders, including online-only and local, smaller shops.

“All too often, some [homebuyers] take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming,” says Mark Hamrick, senior economic analyst for Bankrate. “But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”

More on current mortgage rates

Methodology

Bankrate displays two sets of rate averages that are produced from two surveys we conduct: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).

The rates on this page represent our overnight averages. For these averages, APRs and rates are based on no existing relationship or automatic payments.

Learn more about Bankrate’s rate averages, editorial guidelines and how we make money.

Source: bankrate.com

Apache is functioning normally

Mortgage rates moved moderately higher to begin the new week, but they remained just under the highest recent levels seen last Thursday.  Many lenders were closer to ‘unchanged’ at the outset but were then forced to issue mid-day increases in response to weakness in the bond market.

Bonds directly dictate the day to day movement in mortgage rates.  When bonds change enough during the day, lenders have to react, although they prefer to set rates only once a day for operational reasons. 

Neither the movement over the weekend or during the day was very significant in the bigger picture.  We continue waiting on the more important economic data due out in the coming weeks for the biggest potential impact on rates.  Some of this week’s data could have an impact, but next week’s data represents a much bigger risk (or opportunity).

Source: mortgagenewsdaily.com

Apache is functioning normally

Breck Dumas
February 22, 2024 at 12:04 PM

Mortgage rates continued their upward trend this week, nearing 7% and piling on the unaffordability crisis that threatens to dampen the typical spring buying frenzy.

Freddie Mac’s latest Primary Mortgage Market Survey released Thursday showed that the average rate on the benchmark 30-year fixed mortgage climbed to 6.9% this week, up from 6.77% last week. The average rate on a 30-year loan was 6.50% a year ago.

The rate on the 15-year fixed mortgage also increased, averaging 6.29% after coming in last week at 6.12%. One year ago, the rate on the 15-year fixed note averaged 5.76%.

An “Open House” flag is seen in front of a home for sale in Alhambra, California, on Jan. 18.

REAL ESTATE EXPERT’S ADVICE TO HOMEBUYERS: ‘DON’T BUY’ YOUR AMERICAN DREAM HOME NOW

“Historically, the combination of a vibrant economy and modestly higher rates did not meaningfully impact the housing market,” Freddie Mac chief economist Sam Khater said in a statement. “The current cycle is different than historical norms, as housing affordability is so low that good economic news equates to bad news for homebuyers, who are sensitive to even minor shifts in affordability.”

A “For Sale” sign outside a house in Hercules, California, on May 31, 2022.

Buying activity tends to pick up in the spring following slower winter months, but elevated rates and sky-high home prices have stalled the housing market as more would-be buyers and sellers are priced out or opting not to move.

READ ON THE FOX BUSINESS APP

HAVE KIDS? GOOD LUCK BUYING A HOUSE THIS YEAR

“Recent surges in new listing activities suggested that we might have a busy spring ahead,” said Realtor.com economist Jaiyi Xu. “However, the recent increase in mortgage rates has the potential to slow the market by disrupting the plans of many buyers, especially in a market where a significant number of consumers are anticipating lower mortgage rates, not higher.”

A “For Sale” sign hangs in front of a home in San Mateo County, California, on Aug. 22, 2023.

Robert Frick, a corporate economist at Navy Federal Credit Union, says rates are climbing because the futures markets have temporarily lost faith in the Federal Reserve cutting the federal funds rate soon, and in a “higher for longer” scenario that means higher mortgage rates, too.

“But market expectations can turn on a dime, and are always just one Fed meeting or data drop away from shifting,” Frick told FOX Business. “We saw that mortgage rates around 7% in January actually boosted existing home sales, and if rates fall below 6% this year, as many forecast, home sales volume should accelerate.”

Original article source: Mortgage rates rise again, threatening to slow spring housing market

Source: aol.com

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Automation, Pre-Approval, QC Products; Rent vs. Buy; More Proposed Paperwork for Lenders

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Automation, Pre-Approval, QC Products; Rent vs. Buy; More Proposed Paperwork for Lenders

By:
Rob Chrisman

7 Hours, 10 Min ago

Saturday was George Thorogood’s 74th birthday, and fans know that he wrote the classic tale of rent collection, land ladies, and payment avoidance. Time flies, but that may change. We’re faced with an actual five-day workweek this week, with no Federal holidays until Memorial Day, May 27th, two months away! Yikes. Here in Houston at the TMBA’s Southern Secondary Conference, the attendees are already making use of what time they have, discussing best execution procedures, warehouse tactics, management strategies, economic trends, the market for servicing, and operational efficiencies. I’m a capital markets guy, so arguably learned math good. But I didn’t learn math like this! MBS versus cash sales pick-ups is always a favorite topic, although last year the market was deluged by excess servicing trades. Flow and bulk purchasers of HELOCs and 2nds is search being undertaken by some, as well as climate change and insurance cost increases. (Found here, this week’s podcast is brought to you by nCino, makers of the nCino Mortgage Suite for the modern mortgage lender. nCino Mortgage Suite’s three core products – nCino Mortgage, nCino Incentive Compensation, and nCino Mortgage Analytics – unite the people, systems, and stages of the mortgage process. Today’s has an interview with Yardsworth’s Matt Lucido on creative ways that homeowners can leverage their tappable equity, and how we can see more supply hit the market.)

Lender and Broker Services, Products, and Software

Promising Updated MBA Forecast: The MBA released their recent forecasted predictions on mortgage originations (1 to 4 family). A welcome sight is that they predict a 25+ percent increase in 2Q over 1Q 2024 and a 13 percent increase in 3Q over 2Q 2024. In addition, the 3Q 2024 prediction is nearly 22 percent higher than the same quarter in 2023’s actual originations. As volumes continue to rise quickly, having a solid quality control program is as important as ever in order to continue to produce quality loans while mitigating risk. Quest Advisors has nearly 30 years of experience in assisting mortgage lenders with their quality control needs. Examples of services Quest Advisors provides, are Post-Closing and Prefunding loan QC reviews, along with Servicing, HMDA, and MERS audits. To find out more information on how Quest Advisors can help, please reach out to Matthew Reich at (336) 404-1409.

Tired of paying costly Agency LLPAs for non-owner occupied (NOO) and second home loans? More than 150+ originators have signed up to receive daily mandatory bids and MAXEX is currently winning more than 10 percent of loans bid! Get competitive pricing from five leading non-agency buyers and underwrite to Agency guidelines while avoiding Agency LLPAs. It all seamlessly integrates with your existing bulk trading process. Visit maxex.com/conforming to learn more.

Get a Sweetheart Deal with Loan Stream’s February Specials on FHA/VA and Non-QM price improvements! Get 37.5 BPS Price Improvement on all FHA and VA, Low Balance, and High Balance >=680 FICO, excludes DPA and 25 BPS Price Improvement on FHA Streamlines/IRRRLS. Plus, a Non-QM Price Improvement of 50 BPS on all Non-QM, not including Closed End Seconds and Select Programs. Valid for loans locked 2/1/2024 through 2/29/2024. Terms/Conditions apply see our site and talk with your Account Executive.

“Everyone wants to make their borrowers sticky and we’ve got the Krazy Glue. I’m talking ‘gotta get to the emergency room to get your fingers unstuck’ kind of glue. It’s called QuickQual, it integrates with Encompass® by ICE Mortgage Technology™ and once you pre-approve your borrower, they’re coming back.

Just as Morpheus offered Neo the ultimate choice between reality and illusion in The Matrix, Dark Matter Technologies invites you to choose between the past and the future of mortgage lending in its “Choose Your LOS Experience” ad campaign. Take the blue pill and stay the course with old-school thinking and technology. Or take the red pill and join DMT to revolutionize your business with cutting-edge technology, unparalleled automation, and relentless innovation, as evidenced by the Empower® LOS and the AIVA® artificial intelligence solution. When it comes to your future, “choose wisely.” Schedule a demo with the Dark Matter team today to explore how the Empower LOS can transform your business.

Is More Paperwork Heading Our Way?

Do we need more rules and regulations and paperwork, or better rules and regulation and paperwork? The federal bank regulatory agencies announced their first of a series of requests for comment to reduce regulatory burden. The Economic Growth and Regulatory Paperwork Reduction Act of 1996 requires the Federal Financial Institutions Examination Council and federal bank regulatory agencies to review their regulations every 10 years to identify any outdated or otherwise unnecessary regulatory requirements for their supervised institutions.

To facilitate this review, the agencies divided their regulations into 12 categories and are first soliciting comments on their regulations in three categories: Applications and Reporting, Powers and Activities, and International Operations. Comments on the relevant regulations will be accepted for 90 days after publication in the Federal Register.

But Ballard Spahr reports that on February 16, the Financial Crimes Enforcement Center (“FinCEN”) published a Notice of Proposed Rulemaking (“NPRM”) regarding residential real estate. The final version of the NPRM published in the Federal Register is 47 pages long. We have created a separate document which more clearly sets forth the proposed regulations themselves, at 31 C.F.R. § 1031.320, here.

“FinCEN also has published a Fact Sheet regarding the NPRM, here. The Fact Sheet, slightly over four pages long, is helpful and walks through the basics of many of the proposed requirements. The NPRM proposes to impose a nation-wide reporting requirement for the details of residential real estate transactions, subject to some exceptions, in which the buyer is a covered entity or trust. Title agencies, escrow companies, settlement agents, and lawyers need to pay particular attention to the NPRM because, based on FinCEN’s “cascade” approach to who should be responsible for complying with the reporting requirements, these parties are the most likely to be responsible.

”Rent Versus Own” Economics

If you’re still paying off your mortgage, renting is likely cheaper than owning in each of the nation’s 50 largest metros. Median rent costs are lower than median homeowner costs for those with mortgages but higher than costs for homeowners without mortgages. LendingTree analyzed housing data to compare monthly rental and housing payments for homes with and without mortgages in the 50 largest metros in the U.S.

The difference between median housing costs for homes with a mortgage and median gross rent is $563 a month. The spread in costs between renting and owning a home with a mortgage is widest in the San Jose, Calif., San Francisco, and New York metros. The difference between the median monthly housing costs for homes with a mortgage and the median monthly gross rent in these metros is $1,341, $1,303, and $1,289, respectively. Phoenix, Orlando, Fla., Jacksonville, Fla., and Atlanta have the narrowest gaps between renting and owning a home with a mortgage. In Phoenix and Orlando, median gross rent costs are $87 and $145 less than median monthly housing costs for homes with a mortgage. In both Jacksonville and Atlanta, the difference is $216.

That said, Barron’s reports that, “Prospective buyers spent the President’s Day holiday last week window shopping, early data suggest. ‘Showing activity was strong,’ says Orphe Divounguy, a senior economist at Zillow, citing data from home tour software company Showingtime. Home touring activity was up 19.4% from the start of the year, pointing to a strong seasonal ramp-up.”

Capital Markets

Markets are known for “getting ahead of themselves,” and the latest example may be the “insatiable demand” for Nvidia’s artificial intelligence chips. The stock has shot up, resulting in the company briefly surpassing a $2 trillion valuation. But other equity prices have tagged along, boosting the general stock market.

That said, investors have been walking back expectations for Federal Reserve rate cuts. Goldman Sachs, for example, has pushed back expectations for a Fed rate cut to June. If you like rates where they are, fine. If you’re hoping for lower rates to jump start your business in the near future, well…

The dominating market narrative recently has been that while interest rate cuts may be appropriate at some point this year, it is not likely to be anytime soon. Resilient economic growth and optimism that inflation will continue to fall in the face of high interest rates has fostered household demand, bolstered expectations the U.S. will avoid a downturn in the near term and forced investors to ratchet back bets on early rate cuts. Philadelphia Fed President Harker warned against betting on early rate cuts late last week, saying “I will signal my belief that we’re ready for a rate decrease when all the data, both the hard and the soft, give me that signal.” Pricing in fed funds futures has all but erased the chance of a March rate cut, and the chance of a cut in June is currently a coin-toss. Economists now see a 40 percent chance of recession in the next year, the lowest reading since mid-2022.

Last week was fairly quiet in terms of economic releases and the few that came out did nothing to change the current narrative of U.S. economic conditions. The Leading Economic Index declined 0.4 percent versus a -0.3 percent forecast and is now just two points above its April 2020 low. Historically, the prolonged decline observed in this data set predates a recession, but at the moment, it appears this recession signal is out of step with current economic conditions. Elsewhere, existing home sales rose 3.1 percent in January thanks in part to declining mortgage rates in December.

Since then, rates have moved back up towards 7 percent. The FOMC has repeatedly indicated it is in no hurry to begin reducing the fed funds rate until they are fully confident inflation is sustainably moving towards their 2 percent goal.

This week opens with $169 billion in month-end supply over the first two days along with the usual $309 billion in Treasury bills. There are several important economic releases with the highlight being the Fed-favorite PCE price index for January is on Thursday. We will also receive durable goods for January, home price indexes for December, consumer confidence for February, the second reading on Q4 GDP, Chicago PMI for February, January construction spending, and final February consumer sentiment.

The deadline for Congress to avert a partial government shutdown is Friday. Today starts quietly with new home sales for January, expected to register 680k versus 664k in December, Dallas Fed manufacturing business index for February, and remarks from the new Kansas City Fed President Schmid. The Treasury will auction $63 billion 2-year notes, $70 billion 6-month bills, $63 billion 5-year notes, and $79 billion 3-month bills. We begin the week with Agency MBS prices roughly unchanged from Friday’s close and the 10-year yielding 4.24 after closing last week at 4.26 percent. Helping ARM rates, the 2-year is down to 4.68 percent.

Jobs and Transitions

Logan Finance is hiring! Non-QM Account Executives are in high demand at Logan Finance, especially those of you in Florida. Contact us today to learn more. Speaking of hiring, Logan is happy to announce that Ryan Rathert and Sarah Gonzalez have joined the executive team as Chief of Staff and Chief Operating Officer, respectively. Ryan is a proven mortgage finance wizard and Sarah a renowned industry maven, so put your sunglasses on, because the future at Logan is bright! And the spotlight will be on Logan’s SVP Business Development, Paul Jones, as he presents “Discover the DSCR Difference with Logan Finance”, session #2 in the monthly series, “The Modern Non-QM Experience”. Join Paul on March 6 at 2pm ET. Register here. If you’re looking for a Non-QM career boost, send your resume or check out LoganWholesale.com and LoganCorrespondent.com for more information. Join Logan and become a #LoganLeader today.

“Don’t just close loans, close the gap on your potential. Kind Lending is seeking mortgage professionals with an entrepreneurial spirit and KIND mindset. We will provide a comprehensive catalog of loan products to serve your clients, along with advanced marketing and tech tools to grow your brand and exponentially expand your reach. You will be empowered to rewrite your success by leveraging the powerful tools available at your fingertips. It’s your business. We are here to fuel it. If you are ready to build win-win relationships with a company that values you and your growth, contact Traci Miller, National Talent Acquisition Manager.”

Click n’ Close, a multi-state mortgage lender serving consumers and mortgage originators through its wholesale and correspondent channels and formerly known as Mid America Mortgage, announced Polly Cracchiolo has joined the organization’s third-party originator (TPO) sales team as an account executive.

 Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

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Home prices, mortgage rates remain high as inflation cools – CBS News

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While inflation has shown signs of cooling, mortgage rates and home prices are still stubbornly high, making it challenging for many Americans to buy homes. Elise Preston reports.

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Source: cbsnews.com

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Rates are “data dependent” and the two biggest pieces of economic data are CPI and the big jobs report.  Neither are on today’s calendar, but there was an anecdotal indicator for the jobs report in the form of weekly jobless claims.  This usually forgettable, but if there was one week of the month to pay attention, it would be when the report covering the 12th of the month comes out.  Why the 12th?  The survey for the big jobs report (BLS Employment Situation / nonfarm payrolls) is conducted on the week that includes the 12th.  With that in mind, the bond market did a good job of overlooking a stronger result this morning and actually took solace in S&P PMI data just over an hour later.  Despite the recovery, yields are edging back into slightly higher territory heading into the PM hours (for reasons unknown).

This weakness is occurring at unfortunate levels as some might see it as a failure to find support at the 4.32% ceiling.  It’s still too soon and too close to call in the bigger picture, however.

Source: mortgagenewsdaily.com

Apache is functioning normally

Our experts answer readers’ home-buying questions and write unbiased product reviews (here’s how we assess mortgages). In some cases, we receive a commission from our partners; however, our opinions are our own.

Mortgage rates jumped up last week following the release of some hotter-than-expected inflation data. Because the economy is still so strong, it’s possible that the Federal Reserve could keep the federal funds rate higher for longer, which would likely keep mortgage rates elevated as well. 

Currently, average 30-year mortgage rates are around 30 basis points up from January’s average, according to Zillow data.

Mortgage rates are expected to go down this year, but they likely won’t start falling until we get more data showing that inflation is continuing to slow. Once it looks clearer that inflation is coming down to the Fed’s 2% target, mortgage rates should ease.

Mortgage rates don’t directly follow the federal funds rate, but they’re often pushed up or down based on how investors expect Fed moves to impact the broader economy. 

In a speech given at the National Association for Business Economics last Friday, San Francisco Fed President Mary Daly said that while the Fed has made a lot of progress in bringing inflation down, it needs “more time and data” to be sure that price growth will continue to slow. 

“We will need to resist the temptation to act quickly when patience is needed and be prepared to respond agilely as the economy evolves,” Daly said.

Last week, the Consumer Price Index and the Producer Price Index, two popular measures of inflation, both came in hotter than forecasts expected. Markets took this as a sign that we may need to wait longer for the Fed to start cutting rates, and mortgage rates trended up as a result. 

At the moment, investors believe the Fed might start cutting rates at its June meeting, according to the CME FedWatch Tool. But whether this happens depends on the path inflation takes over the next few months.

Mortgage Rates Today

Mortgage type Average rate today
This information has been provided by Zillow. See more mortgage rates on Zillow Real Estate on Zillow

Mortgage Refinance Rates Today

Mortgage type Average rate today
This information has been provided by Zillow. See more mortgage rates on Zillow Real Estate on Zillow

Mortgage Calculator

Use our free mortgage calculator to see how today’s interest rates will affect your monthly payments.

Mortgage Calculator

$1,161 Your estimated monthly payment

Total paid$418,177
Principal paid$275,520
Interest paid$42,657
  • Paying a 25% higher down payment would save you $8,916.08 on interest charges
  • Lowering the interest rate by 1% would save you $51,562.03
  • Paying an additional $500 each month would reduce the loan length by 146 months

By clicking on “More details,” you’ll also see how much you’ll pay over the entire length of your mortgage, including how much goes toward the principal vs. interest.

30-Year Fixed Mortgage Rates

This week’s average 30-year fixed mortgage rate is 6.77%, according to Freddie Mac. This is a 13-basis-point increase from the previous week.

The 30-year fixed-rate mortgage is the most common type of home loan. With this type of mortgage, you’ll pay back what you borrowed over 30 years, and your interest rate won’t change for the life of the loan.

The lengthy 30-year term allows you to spread out your payments over a long period of time, meaning you can keep your monthly payments lower and more manageable. The trade-off is that you’ll have a higher rate than you would with shorter terms or adjustable rates. 

15-Year Fixed Mortgage Rates

Average 15-year mortgage rates inched down to 6.12% last week, according to Freddie Mac data. This is a 22-point increase since the week before.

If you want the predictability that comes with a fixed rate but are looking to spend less on interest over the life of your loan, a 15-year fixed-rate mortgage might be a good fit for you. Because these terms are shorter and have lower rates than 30-year fixed-rate mortgages, you could potentially save tens of thousands of dollars in interest. However, you’ll have a higher monthly payment than you would with a longer term.

How Do Fed Rate Hikes Affect Mortgages?

The Federal Reserve has increased the federal funds rate dramatically to try to slow economic growth and get inflation under control. So far, inflation has slowed significantly, but it’s still a bit above the Fed’s 2% target rate.

Mortgage rates aren’t directly impacted by changes to the federal funds rate, but they often trend up or down ahead of Fed policy moves. This is because mortgage rates change based on investor demand for mortgage-backed securities, and this demand is often impacted by how investors expect Fed hikes to affect the broader economy. 

The Fed has indicated that it’s likely done hiking rates and that it could start cutting soon. This will likely allow mortgage rates to trend down later this year.

When Will Mortgage Rates Go Down?

Mortgage rates increased dramatically over the last two years, but they’ve been falling in recent months, and are expected to drop further this year.

In January 2024, the Consumer Price Index rose 3.1% year-over-year. Inflation has slowed significantly since it peaked last year, which is good news for mortgage rates.

For homeowners looking to leverage their home’s value to cover a big purchase — such as a home renovation — a home equity line of credit (HELOC) may be a good option while we wait for mortgage rates to ease. Check out some of our best HELOC lenders to start your search for the right loan for you.

A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you borrow what you need rather than getting the full amount you’re borrowing in a lump sum. It also lets you tap into the money you have in your home without replacing your entire mortgage, like you’d do with a cash-out refinance.

Current HELOC rates are relatively low compared to other loan options, including credit cards and personal loans. 

Molly Grace

Mortgage Reporter

Source: businessinsider.com

Apache is functioning normally

One of the upsides of these weeks with boring, sideways movement in the rate market is that it doesn’t take much of an improvement to undo several days of damage.  Today brought just such an improvement, and not for any compelling or interesting reasons either!

The average lender began the day at lower levels–already close to the best levels of the week.  But as the bond market improved throughout the day, most lenders were able to make mid-day changes to their rate offerings.  After incorporating those changes into our daily average, it easily dropped to the best levels of the week.

Volatility could increase slightly next week amid the presence of much more economic data.  The MOST relevant data won’t show up until the first week of March, however, and that’s when volatility risks are the highest, for better or worse.

Source: mortgagenewsdaily.com