New Home Sales Dissapoint
The New Home Sales report was a bit of a dissapoint today. The market was expecting a 1.50% increase and an annual rate of 730,000 new units however the report came in lower than that. The percentage change declined -0.4% and the annual rate of new homes being built came in at 694,000 units. Not a huge dissapoint but certainly not what the market had hoped for.
The Ten Year Yield:
Anyone watchin the 10 year yield today? At one point it broke 1.60% on fears the Coronavirus would get worse and impact the global ecocomy. Mortgage experts noted that while the 10 year yield sank the Mortgage Backed Securities market finished the day unchanged.
The FNMA 3.5 coupon finished last week around 103.09 and today it finished around 103.11. Probably not the news consumers want to hear and it deffinetly puts Loan Officers in a tough spot; well at least the Loan Officers who think the 10 year yield dictates mortgage rates (it doesn’t).
What’s Next For Mortgage Rates?
I would be surprised to see any further decline in mortgage rates. I think the more likely scenario is that the market bounces from here and moves higher. Even if the Coronavirus gets worse I just don’t see Mortgage Backed Securities significantly improving in the near future. Also mortgage lenders have rates that are really low right now and business is good so they have little incentive to dramactically reduce interest rates from these current levels.
Coud we see a small move down? Sure but if you are in a position to lock in terms than don’t hesitate. The market can turn and when it does it will most likely turn quickly. Locking in a mid 3% 30 year fixed rate or a low 3% 15 year fixed doesn’t come around often so make sure you don’t lose out.