Weekly Mortgage Rate Update-10-22-2024
The rise in rates over the past three weeks has been steady and just when we thought/hoped rates had peaked, they made another run higher on Monday.
It’s a bit unclear why rates rose so much on Monday. There were no major economic releases or events. Usually, we have a pretty good idea of why rates move, but this time at a bit of a loss. So, to summarize all the market commentor opinions- Rates are recalibrating based on a better economic outlook, reacting to increasing supply of bonds to fund deficits(current and projected), hedging their election bets, bond market rebelling against what it considers a policy error by the Fed on the first large rate cut, and just now hearing there are concerns over bank liquidity again as the reverse repo balance gets to critical lows. Maybe we will get a clearer picture over the coming days.
Is this just the October Effect? Looking back over the past 2 Octobers we saw rates peak in October before retreating down some. Hope that is the case here.
Retail sales last week came in 5 times stronger than expectations. A closer look reveals that this retail sales report was seasonally adjusted by the largest seasonal adjustment ever recorded. So, is retail sales stronger or not? Without seasonal adjustments the report would have showed a decrease of -7.5% instead of a 0.4% increase for September. That’s a pretty big difference in how the economy would look.
This week doesn’t have any significant economic reports. Oil continues to be a driver for the rate direction. Also, this is the last week Fed speakers are out ahead of the black out period before the next Fed meeting , so watching for them to give some indication of the Fed path from here.
Rates are at a critical level, the 200-day moving average. If we can’t hold on to the pricing here it will represent a significant shift in the rate outlook. Let’s hope we hold here. As the election draws closer more volatility can be expected as traders bet on the economic impact of the results.
|
Loan Type |
Conventional 30 year |
Conventional 15 year |
FHA 30 year |
VA 30 Year |
|
Interest rate |
6.625% |
5.99% |
5.75% |
5.99% |
|
APR |
6.784%* |
6.246%* |
6.765%** |
6.137%*** |
LICENSED BY THE CALIFORNIA DEPARTMENT OF REAL ESTATE LICENSE A division of TYKY (DRE #01919683) (NMLS LICENSE #257773)
RATES ARE CURRENT AS OF 10-22-2024. SUBJECT TO BORROWER APPROVAL, FICO SCORE, LTV AND PROPERTY TYPE
*APR IS BASED ON ESTIMATED FINANCE CHARGES OF $6935
**APR IS BASED ON ESTIMATED FINANCE CHARGS OF $10,969 THIS INCLUDES FHA MORTGAGE INSURA
NCE PREMIUM
***APR BASED ON ESTIMATED FINANCE CHARGES OF $8343
FEES INCLUDE 1% POINTS, NO Loan Origination Fee , $1095 PROCESSING AND $0 UNDERWRITING FEE
* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.