Mortgage rates held their ground today, with the average lender in roughly the same shape as they were on Friday. Incidentally, that’s great shape! When it comes to the best-case scenario conventional 30yr fixed quote, rates are still very close to the all-time lows seen two weeks ago. Scenarios with additional risk factors (jumbo balances, lower credit, lower equity or investment properties), the landscape is far more varied. For those scenarios, rates are much farther away from all-time lows.
Will rates be able to remain at these levels or perhaps even set new all-time lows? More and more, this depends entirely on the course of a potential “2nd wave” of coronavirus impacts. This seems to be far more of an issue for some states than others right now. If we see resurgences in states that had already clearly turned the proverbial corner, the reaction in financial markets would be more pronounced.
Simply put, if too many people end up dead or in the hospital due to COVID-19, interest rates would likely stay low or even improve. The opposite logic doesn’t perfectly apply. Rates can avoid a massive spike even if coronavirus numbers gradually improve.
Loan Originator Perspective
Bonds regressed slightly Monday, but my pricing nearly mirrored Friday’s. With rates very near all time lows, it’s prudent to lock sooner rather than later, as long as the pricing you’re getting meets your goals. Discuss the pricing difference between various lock lengths with your originator. –Ted Rood, Senior Originator, Bayshore Mortgage