It's going to be a great week
Good Monday Morning!
Mortgage interest rates went on a wild ride last week as they went up and down many times. The good news is that rates ended the week in decline. Much of the rate reaction is tied to the bond market, which was also on a wild ride last week. We are in the midst of an economy make over, which has to take place. What we see happening right now is a temporary situation and the benefits of the new economic policies will be realized down the road soon. One of the key events to watch is the war between the Whitehouse and the Fed. The Whitehouse wants to see a rate decline now that inflation is in check and the Fed is resisting. If the Whitehouse wins this battle and we see a series of rate reductions by the Fed, look for some immediate mortgage interest rate improvement. The following is a recent article from "Realtor.com".
Mortgage rates jumped 20 basis points over the last week, but by the end of the week, rates were back below 7%. New tariff policies and stock market fluctuations prompted some economic turmoil last week. So, what should buyers be paying attention to as they contemplate applying for a mortgage?
“Economists are currently eyeing any potential changes in the bond market that would impact the mortgage market,” says Jessica Lautz, deputy chief economist at the National Association of REALTORS®. “China holds about $760 billion in U.S. bonds, raising eyebrows given the trade war. Japan is currently the largest holder of U.S. bonds.”
When bond prices fall, it can lead to higher mortgage rates.
Economic uncertainty “is likely to make at least some prospective buyers more hesitant to move forward with a purchase,” says Mike Fratantoni, senior vice president and chief economist at the Mortgage Bankers Association. Reflecting that, mortgage applications for home purchases—a gauge of future home buying activity—fell 5% last week. But MBA’s index notes: Loan applications for home purchases are still 13% higher compared to the same week a year ago.
Some Buyers Quickly Spring Back In
Considering mortgage applications for home purchases are posting double-digit percentage annual increases, “it’s a clear sign that this year’s spring home buying season is off to a stronger start” than last year, says Sam Khater, Freddie Mac’s chief economist.
“The 30-year fixed settled some from the bounce-house activity in the week prior,” and housing inventory is on the rise, says Lautz. NAR’s data shows that unsold inventory is up by double digit percentages compared to a year ago, offering prospective home buyers more choices of homes for-sale than they’ve had in years. “Spring buyers are in a better position with more inventory in many markets,” Lautz says. So “while some are cautious in the face of uncertainty, others will jump at better opportunities.”
To offset higher rates last week, more prospective home buyers reached for the ARMs—adjustable-rate mortgages. The share of ARM applications was up a full percentage point in just one week, MBA reported. ARMs offer an initial fixed rate—lately closer to 6%, lower than 30-year fixed rate average—before adjusting to current rates in five or seven years. Given the jump in rates last week, “more borrowers are opting for the lower initial [payments] that come with an ARM,” Fratantoni says. The ARM share of mortgage applications reached about 10%, the highest since November 2023. “On a dollar basis, almost a quarter of the application volume last week was for ARMs, as borrowers with larger loans are even more likely to opt for an ARM,” he adds.
A Close Watch on Mortgage Rates
At this week’s 30-year average of 6.83%, home buyers would likely have a monthly mortgage payment of $2,093 for a home priced at $400,000, assuming a 20% down payment, Lautz says. With a 10% down payment, the typical monthly payment would be $2,354.
Freddie Mac reports the following mortgage rate averages for the week ending April 17:
- 30-year fixed-rate mortgages: averaged 6.83%, rising from last week’s 6.62% average. A year ago, 30-year rates averaged 7.1%.
- 15-year fixed-rate mortgages: averaged 6.03%, up from last week’s 5.82% average. Last year at this time, 15-year rates averaged 6.39%.
Have An Awesome Week!
Stay Healthy! Stay Safe! Remain Positive! Trust in God!
THIS WEEKS HOT HOME LISTING!
2181 Turning Oak Pl Eugene, OR 97408
Price: $808,000 Beds: 4 Baths: 3.0 Sq Ft: 2269
Welcome to one of the most sought-after neighborhoods off N. Gilham! This stunning home offers the perfect blend of comfort, style and quality. Thoughtfully designed with attention to every detail, it features light engineered hardwood floo... View this property >>
