A quick weekly overview of where the mortgage markets are, where they have been, and where they are expected to go.

• Looking Back: In the previous week, we once again saw a great deal of volatility in mortgage rates, but in the end very little movement. Rates dropped significantly in the middle of the week, and then rose again on Thursday wiping out most of the gains from earlier in the week, ending the week with mortgage prices roughly 25bps better than where they started the week.
• Right Now: For the “ideal” borrower (i.e. down payment on a purchase or equity for a refinance of at least 20%, FICO score of 740 or higher, and paying 1 discount point, with loan amounts of $417k or less on a 30-year fixed-rate mortgage) in the DC area, rates are currently in the 5.250% to 5.500% range.
• Moving Forward: Technical indicators still imply that the markets underlying rates might improve in the long run, but the stock market continues to siphon funds away from mortgages, making it hard for mortgage rates to stay low for any extended period of time in the short run. In Bankrate’s weekly survey of mortgage analysts about where they expect rates to move in the next 45 days, 27% predicted that rates would go up, 46% predicted that rates would stay roughly level, and 27% predicted that rates would go down over that period. In the shorter term, a large supply of Treasury Bond auctions next week will probably prevent lenders from lowering rates unless bond markets not only rally but sustain that rally throughout the week; barring that sort of sustained rally, expect rates next week to at best stay flat, most probably rise a little, and possibly rise significantly if auction demand is weak while stock demand stays strong.

These updates are intended to give you a very quick snapshot of current mortgage rate trends. As a result, they are full of simplifications and assumptions; if you are currently in the process of purchasing or refinancing a loan, make sure to talk to your mortgage loan consultant about your specific scenario and the factors that affect it. If you aren’t working with a loan consultant yet, feel free to contact us and we’d be glad to meet with you for one of our free, no-obligation mortgage scenario consultations. And if you’re a data junkie and want to follow the gyrations of the mortgage markets in real time, learn about the shorthand that we use in discussing mortgage pricing and then follow us on Twitter.

Possibly related posts (automatically generated):

1. Mortgage Market Update 7/17/09
2. Mortgage Market Update
3. Mortgage Market Update 7/31/09
4. Mortgage Market Update 8/21/09
5. Mortgage Market Update 8/7/09
6. A guide to the Twitter hashtags that we use.
7. Demand for new homes continues to rise
8. Why You Can’t Predict Interest Rate Movements
9. When Should You Lock In The Rate On Your Mortgage?
10. FHA/VA Adjustable-Rate Mortgages Can Be A Great, Safe, Deal

Tags: mortgage, trends