The SCOOP! Blog by® 'Stress-Free Mortgages'

Benchmark Mortgage Rate Stabilizes As Applications Jump

April 16th, 2020 9:26 AM by Jackie A. Graves

The benchmark 30-year fixed-rate mortgage stayed flat at near the record low of 3.58 percent, according to Bankrate’s weekly survey of large lenders.

Total mortgage application volume rose 7.3 percent last week from the previous week, reports the Mortgage Bankers Association’s 30-year-old weekly survey. But lenders are also raising their requirements, making it tougher for borrowers to get a loan.

A year ago, the 30-year rate was 4.34 percent. Four weeks ago, the rate was 3.88 percent. The 30-year fixed-rate average for this week is 0.78 percentage points below the 52-week high of 4.36 percent, and is 0.02 percentage points above the 52-week low of 3.56 percent.

The 30-year fixed mortgages in this week’s survey had an average total of 0.32 discount and origination points.

Over the past 52 weeks, the 30-year fixed has averaged 3.90 percent. This week’s rate is 0.32 percentage points lower than the 52-week average.

  • The 15-year fixed-rate mortgage rose to 2.99 percent from 2.97 percent.
  • The 5/1 adjustable-rate mortgage fell to 3.63 percent from 3.71 percent.
  • The 30-year fixed-rate jumbo mortgage fell to 3.89 percent from 3.94 percent.

At the current 30-year fixed rate, you’ll pay $453.52 each month for every $100,000 you borrow, unchanged from last week.

At the current 15-year fixed rate, you’ll pay $690.10 each month for every $100,000 you borrow, up from $689.14 last week.

At the current 5/1 ARM rate, you’ll pay $456.33 each month for every $100,000 you borrow, down from $460.85 last week.

Where mortgage rates are headed

In the week ahead (April 16-22), 8 percent of the experts predict that rates will rise, 42 percent of the experts predict a drop in rates and 50 percent predict that rates will remain relatively unchanged (plus or minus 2 basis points).

“The functioning of the mortgage market is improving, there is still tons of uncertainty about the path forward for the economy and we’re getting March economic data that is as bad as feared. All of this points to lower mortgage rates,” said Greg McBride, senior vice president and chief financial analyst, Bankrate.

“Economic numbers reported this week have been awful. Retail sales are at -8.7 percent, the Empire State Index is -78.2, and oil is below $20 a barrel,” said Jim Sahnger, planner, C2 Financial Corporation Jupiter, Florida. “The retail sales and Empire State numbers are the worst numbers posted in their recording. Things aren’t going to get better any time soon. The only bright spot is for people looking to refinance or buy a home, rates have improved following their spike from the middle of March. Look for rates to continue to drift down a bit over the next week.”

For homebuyers and refinancers, great deals, more hassle

Rate watchers want to know if this is the time to jump on low mortgage rates or if they should wait a little longer in hopes of getting even deeper discounts on loans. It’s a good bet rates will trend lower or at least stay at these low levels for many weeks and possibly months to come.

Keep in mind that many lenders have raised their posted rates to discourage inquiries because they are so busy. It’s important to call the lender to find out if they can do better than a rate you see online; oftentimes they can.

Jumbo borrowers will find they must cast a wide net to find a lender because many have exited this market to cut back on risk. In addition, refinancing with cash out is shrinking as well because lenders are worried people will lose their jobs and be unable to pay, while home values could possibly fall.

There is also the possibility that the spread between the Treasury yields and mortgage rates will tighten, which will help drive rates lower. But with the federal Reserve’s move to intervene in the mortgage-backed securities market, anyone who wants a mortgage this spring should be able to snag a super-low rate.

Source: To view the original article click here


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