Thursday, October 11, 2012

Rates are racing?

For the first time in 7 weeks, mortgage rates are rising.
According to Freddie Mac's weekly mortgage rate survey, the average 30-year fixed rate mortgage rose to 3.39% nationwide, and the average 15-year fixed rate mortgage rate rose to 2.70%. The 30-year rate is available to borrowers willing to pay 0.7 discount points at closing plus a full set of closing costs. The 15-year fixed requires just 0.6 discount points.
Zero-point and zero-closing cost mortgage rates are slightly higher than the Freddie Mac average.

7-Week Mortgage Rate Winning Streak Broken

The mortgage market is a streaky one; subject to momentum. Over long periods of time, mortgage rates tend to rise and fall in long arcs. Those arcs, though, when chunked into months or even weeks can appear a bit more choppy.
Rates can't fall every week, after all, and this week proves it.
For the first time since late-August, and for just the 11th time this year, mortgage rates have increased on a week-over-week basis. The conforming 30-year fixed rate mortgage and the 15-year fixed rate mortgage rate climbed 3 and 1 basis points, respectively.
The bump in rates breaks a 7-week mortgage rate winning streak, tied for second-longest streak of the year :
  • Dec 29 - Jan 19, 2012 : 4-week mortgage rate winning streak, from 3.95% to 3.88%
  • Apr 19 - Jun 7, 2012 : 8-week mortgage rate winning streak, from 3.90% to 3.67%
  • Jun 14 - Jul 26, 2012 : 7-week mortgage rate winning streak, from 3.71% to 3.49%
  • Aug 30 - Oct 4, 2012 : 7-week mortgage rate winning streak, from 3.66% to 3.36%
The longest "losing" streak this year occurred between July 26 and August 30, a run halted by the Federal Reserve's Labor Day meeting in Jackson Hole, Wyoming at which Fed Chairman Ben Bernanke hinted that new economic stimulus was forthcoming.
Two weeks later, the Fed launched its third round of qualitative easing (QE3). Mortgage rates have been in decline since.

FHA And VA Mortgage Rates Stay Improved

The weekly Freddie Mac survey tracks short- and long-term trends within the world of conforming mortgage rate. By definition, the Freddie Mac survey ignores how mortgage rates for FHA mortgages and VA loans perform. This is because FHA and VA home loans aren't tied to Freddie Mac-backed mortgage bonds.
Both FHA mortgage rates and VA mortgage rates are "made" based on the price of a Ginnie Mae mortgage bond and, lately, Ginnie Mae mortgage bonds have performed well.
For as far as conforming mortgage rates have dropped, FHA and VA mortgage rates have dropped more. Since the start of September, Ginnie Mae bond pricing has outperformed Fannie Mae bond pricing by 50% and today's FHA and VA mortgage rate shoppers have noticed.
Both rates are at all-time lows, spurring a rush of refinance applications.
The FHA Streamline Refinance is in high-demand and underwriters are challenged to keep up with VA Streamline Refinance / IRRRL application volume.

Get A Real-Time Mortgage Quote

Mortgage rates remain low and home affordability remains high. If you've been watching mortgage rates fall and wondering when to refinance, now is as good of a time as any. Mortgage rates may resume falling next week, or they may not.
The last time mortgage rates rose to stop a winning streak, they climbed for 4 straight weeks thereafter.