Good Afternoon,
Although we did not see a huge rally today in neither the bond nor stock market, lenders improved mortgage rates at around 4pm. What caused this is relatively simple and was predicted as long as nothing big and unexpected happened in other news today.
Here’s the inside Dripp…
The Fed did not take a confident decision to announce a future change to the Federal Funds Rate of 2%. There are simply too many aspects of the economy working against making a decision to even slightly change rates. The financial sector is suffering, consumers are spending less and inflation is climbing. The Fed can stimulate spending by lowering rates, but at the same time has to raise rates to combat inflation. Aren’t you all glad that you do not have to make those decisions? I will stick to analyzing them, thank you very much!
So what should you be expecting in regards to refinancing in the short term?
I can confidently say that even if base mortgage rates improve, they will in fact get worse. How is that possible? Fannie Mae continues to increase its fees for different credit score levels among other things. For example, people who have a credit score less than 740 will pay a higher fee to get the same rate as someone who has a higher credit score. Someone less than a 700 will also pay a higher fee than the person with a 730, and so on. So even though rates may go down they will still end up being higher than before.
Tomorrow there is only one economic report coming out:
- July’s Durable Goods Orders: This measures orders for big-ticket items for manufacturing companies. This is yet another report that can greatly influence mortgage rates. A 0.2% rise is expected.
Should I lock if I’m closing within:
- 15 days? YES
- 30 days? NO
- 45 days? NO
- 60 days? NO
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