The Home Loan Mortgage Blog

Weekly Update - 3/27/20

March 27th, 2020 2:21 PM by T. Fanning



Hi, I hope you and your family are staying safe!

The roller coaster ride continues. Programs are being suspended and guidelines are tightening. Conventional, conforming loans and government loan interest rates had a significant decrease; ARM's and Jumbo loan interest rates saw a significant increase. 
Next week has a handful of economic releases that are normally relevant to mortgage rates in addition to a couple of potentially influential Treasury auctions. One or two of the reports stand out as more important than the others, but because they still cover February, they likely will not be of much interest to the markets. There is no reason to believe that the crazy volatility we have seen this week will cease next week. It is highly likely that the markets won't be interested in economic data until it starts to cover the months of March and April.*

We offer Conventional, FHA, VA, USDA, Jumbo and regular construction financing. Some of our niches include: Chenoa Fund loans; FHA and VA 1x Close Construction-Perm; 1% Down Conventional Program; 1.50% Down FHA Advantage Program; CHFA Financing; Down Payment Protection program; HomeStyle renovation program; and a jumbo, 5% down program. We also can do hobby farms, Ag properties and Alt-A (stated income, verified assets for self-employed borrowers)! To see a detailed list of programs, visit our website:  www.hlmcolorado.com/mortgageprograms

As always, please let me know if I can help you/friends/family/potential buyers/borrowers!                

Last Updated: 3/27/20

Friday's bond market has opened in positive territory with stocks showing heavy losses. After three days of gains, the Dow is currently down 862 points while the Nasdaq has lost 270 points. The bond market is currently up 30/32 (0.75%), which with yesterday's steady improvements throughout the day, should allow this morning rates to be noticeably lower than yesterday's early pricing.

Yesterday's 7-year Treasury Note auction went even better than Wednesday's 5-year Note sale. Investor demand was strong enough to see a positive move in bonds after results were posted at 1:00 PM ET. The auction itself wasn't to source of yesterday's late strength but did contribute to the afternoon gains in bonds.

February's Personal Income and Outlays report was posted at 8:30 AM ET this morning, revealing a 0.6% rise in the income reading while spending rose 0.2%. The rise in income exceeded expectations and the spending increase pegged forecasts. The report indicates consumers had more money to spend than thought but didn't spend more. Results of the report are neutral-slightly negative for mortgage rates. However, since it covered February, we have seen no reaction to the news.

The second report of the day was the revised University of Michigan Index of Consumer Sentiment for March. It came in at 89.1, down greatly from the preliminary reading of 95.9 just two weeks ago. This was widely expected due to concerns about the coronavirus and its impact on future income. The large decline is good news because it means consumers are less likely to spend since they are worried about their jobs during this crisis. But the reading fell within the large range of forecasts. Since it did not come as a surprise, we are seeing little reaction to the release.

Next week brings us the release of a good number of economic reports that traditionally influence mortgage rates, including a couple of extremely important releases. More importantly, those highly relevant releases will cover March, giving us insight into how bad the early stages of the coronavirus shutdown were affecting the economy. Over the past couple of weeks, the markets have ignored the monthly and quarterly reports because they covered periods that predated the full-blown virus reaction in the U.S. The upcoming reports will start to reflect how bad the economy is being hit during the crisis.

The most important releases will come mid and late week and there is nothing of relevance set for Monday. We can also expect to see the same influences carry into next week (stock volatility, Fed buying of Treasuries and mortgage bonds, lender pipeline control, etc) that have heavily impacted rates recently. We are set up for the same scenario as recent weeks, only with economic data also coming into play. Look for details on next week's calendar in Sunday evening's weekly preview.

If I were considering financing/refinancing a home, I would....

Lock if my closing were taking place within 7 days...
Float if my closing were taking place between 8 and 20 days...
Float if my closing were taking place between 21 and 60 days...
Float if my closing were taking place over 60 days from now...

This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.*

*http://www.hlmcolorado.com/DailyRateAdvisory




LO NMLS: 208694 | CO License: 100008854 | Company NMLS ID: 479289
Regulated by the Colorado Division of Real Estate
www.nmlsconsumeraccess.org
Posted in:General
Posted by T. Fanning on March 27th, 2020 2:21 PM

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