ABBA First Mortgage News

Rates are steady for the fourth week in a row with slight movements up and down daily

May 28th, 2020

For the week ending May 21, Freddie Mac announced that 30-year fixed rates moved down to 3.24% from 3.28% the week before. The average for 15-year loans decreased to 2.70% and the average for five-year ARMs fell one tick to 3.17%. A year ago, 30-year fixed rates averaged 4.06%, more than 0.75% higher than today. “For the fourth consecutive week, 30-year fixed-rates have been below 3.30 percent, giving potential buyers a good reason to continue shopping even amid the pandemic. As states reopen, we’re seeing purchase demand improve remarkably fast, now essentially flat relative to a year ago. Going forward, rates have room to decline as spreads remain elevated,” said Sam Khater, Chief Economist, Freddie Mac.

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

May 20th, 2020

According to the buzz around town, low mortgage rates in Wilmington coupled with a vibrant real estate market, have prompted many people to shop for a new home even during this time when the fears of a pandemic seem to have kept most of us at home.  I know this for a fact for I sold my home just a couple of weeks ago.  It was a VA mortgage that the buyer ended up with and ABBA First offers great rates for VA loans in Wilmington.  Give us a call at 910-332-0650.

For the week ending May 14, Freddie Mac announced that 30-year fixed rates moved up two ticks to 3.28% from 3.26% the week before. The average for 15-year loans decreased one tick to 2.72% and the average for five-year ARMs rose one tick to 3.18%. A year ago, 30-year fixed rates averaged 4.07%, more than 0.75% higher than today. “Rates on home loans have stabilized at very low levels over the last few weeks as homebuyer demand slowly improves. Although purchase applications reached a new low in mid-April, today purchase demand is only down ten percent from one year ago. While demand is improving, inventory is low and declining with no signs of a turnaround yet,” said Sam Khater, Chief Economist, Freddie Mac.

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Lenders offer low rates with discount points and/or origination fees

May 12th, 2020

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Rates remained near record lows in the past week, as negative economic data continued to dominate the headlines. For the week ending May 7, Freddie Mac announced that 30-year fixed rates moved up to 3.26% from 3.23% the week before. The average for 15-year loans decreased to 2.73% and the average for five-year ARMs rose to 3.17%. A year ago, 30-year fixed rates averaged 4.10%, more than 0.75% higher than today. Attributed to Sam Khater, Chief Economist, Freddie Mac – “Rates on home loans stayed at or near record lows for the fifth straight week and homeowners are taking advantage with refinance activity remaining high. Although purchase demand declined thirty-five percent year-over-year in mid-April, demand has improved modestly over the last three weeks.”

Abba First Mortgage continues to offer some of the lowest rates without points as noted on the RATES page on this website.  Please call toll free at 866-676-3349 to take advantage of some of our unadvertised specials which we offer on a daily basis.

Fixed rates moved slightly higher in the last week, remaining close to record lows.

April 29th, 2020

For the week ending April 23, Freddie Mac announced that 30-year fixed rates moved up slightly to 3.33% from 3.31% the week before. Although the average for 15-year loans increased to 2.86%, it is hard to find a lender that will offer that rate no matter how far and wide one may look.  The typical rate for a 15 year loan is about .25 percent less than what can be found for a 30 year rate.  Most lenders are not pushing the shorter term mortgages.  The average for five-year ARMs fell to 3.28%. A year ago, 30-year fixed rates averaged 4.20%, more than 0.75% higher than today. “Rates have stabilized over the last few weeks as the market searches for direction in the fog of economic data. While financial markets initially rallied on the news of Federal Reserve support and are improving due to the Senate’s passage of a new small business stimulus, we continue to see a deep economic contraction amidst uncertainty about the recovery formation,” said Sam Khater, Chief Economist, Freddie Mac.

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Equifax, Experian and TransUnion Announce Free Weekly Credit Reports to Help Americans in Response to COVID-19

April 20th, 2020

In a joint action, the three national credit reporting agencies in the United States – Equifax (NYSE: EFX), Experian (LON:EXPN) and TransUnion (NYSE:TRU) – announce they are offering free weekly credit reports to all Americans for the next year to help them protect their financial health during the sudden and unprecedented hardship caused by COVID-19.The free reports will be available via AnnualCreditReport.com starting on April 20, 2020.

The companies’ CEOs provided a joint statement on the decision to increase their offerings for the next year. “These are unprecedented times facing the world. People are feeling scared and uncertain about the future. To help play our part and reduce some of that anxiety, we are uniting as an industry to help people know the facts about their financial data. We are making credit reports more accessible more often so people can better manage their finances and take necessary steps to protect their credit standing,” said CEOs Mark W. Begor, CEO Equifax; Brian Cassin, CEO Experian; and Chris Cartwright, CEO TransUnion.

Consumer credit reports are a factual record of credit activity and payment history used by lenders, creditors, service providers and other businesses to extend financial opportunities and other offers to people. Credit reports play an important role in financial health for consumers, businesses and the economy.

Credit vigilance is critical during these uncertain times. Consumers are advised to review their credit reports frequently to understand the information that is being reported about their payment behavior. The single most important action for consumers who cannot pay their bills right now is to talk with their lenders to find out if they are offering any assistance.

The three credit reporting agencies have also worked with their U.S. trade association, Consumer Data Industry Association, to provide guidance to data furnishers on how to support consumer credit reporting during the pandemic.

The free reports will be available by going to:

www.AnnualCreditReport.com

Rates on home loans were stable in the last week, though volatility continued from day-to-day.

April 15th, 2020
For the week ending April 9, Freddie Mac announced that 30-year fixed rates remained at 3.33%. A year ago, 30-year fixed rates averaged 4.12%, more than 0.75% higher than today. “While rates on home loans remained flat over the last week, there is room for rates to move down. This year the 10-year Treasury market has declined by over a full percentage point, yet home loan rates have only declined by one-third of a point. As financial markets continue to heal, we expect rates on home loans will drift lower in the second half of 2020,” said Sam Khater, Chief Economist, Freddie Mac.

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

How high will rates rise?

April 14th, 2020

As dismal as the March unemployment numbers were, we know that this is just a preview of what is to come. The question being bantered about by market analysts is — how high will unemployment become? Let’s take a look at the numbers. Let’s say 10+ million filed for unemployment in the first three weeks that the stay-at-home policies were put in place. That is a minimum of 6.0% of the workforce and would put unemployment near 10% right off the bat. The question is–how much will it rise from there?

The higher it rises, the deeper the recession will become, and the longer it will take to rise from the bottom. Unfortunately, predictions are futile at this point because we don’t know how long it will take to rid us of the virus. We know China was able to achieve such by taking decisive action very quickly. Or perhaps a drug can be found to treat the symptoms and bridge the gap until we find a vaccine.

Right now stay at home is the rule until the end of April at least. If we remain at home until June or later, a very ugly situation could get much uglier. The government stimulus programs and low rates will help. But ending our seclusion will be the real medicine our country needs. We all hope this comes sooner, rather than later. Because we don’t want the unemployment numbers to rise too far from the base we described.

Used with permission from the Origination Pro April 14th

Some Interesting Interest Rate News

April 13th, 2020

Here are some facts that many of you may have known but may not have seen them put together in such a format.  The Fed rolled out their big guns (more like Bazookas) in March to fight the War on Covid19. They made it very clear – to the country and world – they will do ANYTHING to support the global financial markets. The Fed is providing an unprecedented level of liquidity through several channels. The Fed made 2 Emergency Interest Rate cuts to Fed Funds in March: one on March 3 cutting rates by 0.5%, and another on March 15 cutting rates by an additional 1.0%. In a statement, the Fed said they will keep Interest Rates low until they are: “confident that the Economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.” The next FOMC Meeting is scheduled for April 28 and 29.

 

The Fed knows it can’t prevent an Economic downturn, but aggressive Monetary Policy can soften the blow and hasten a recovery. Along with Interest Rate cuts, the Fed announced a litany of additional emergency actions aimed at pumping massive amounts of liquidity into Banks and the Financial Markets. Some of the other actions are:

  • Expanding the Fed’s Balance Sheet by buying $500B of Treasury Securities and $200B of MBS – plus reinvesting payments from Treasury Debt and MBS into purchasing more Treasury and MBS Securities
  • Encouraged Bank and Depository Institutions to use the Discount Window to meet credit demands
  • Lowered the Discount Rate by 1.5% to 0.25% and extended Discount Window borrowing up to 90 days, pre-payable and renewable on a daily basis

Encouraged Banks to use the Fed’s Intraday Credit on a collateralized and uncollateralized basis.

Re- posted with permission from UHM – MBS Huddle   Matthew Graham | 4/2 7:02 PM

What does all of this mean to you, the average, everyday, normal interest rate shopper that happened upon the ABBA First Mortgage website and read the NEWS section and is questioning what’s it all about?  I can only say that we are living in unprecedented times and although we may not know what the future holds, we can safely assume that there are many pieces of the puzzle that are being jostled about trying to find out how we, as an industry, can find a way to make our economy whole once again.  My hope and prayer is that the answer my friend is found soon, before we find ourselves holding each other accountable for each and every negative issue that we face.  That could become ugly.

How low will mortgage rates go? Not to “0” for sure!

March 25th, 2020

Mortgage rates in the U.S. could hit new record lows as the coronavirus outbreak continues, but there are multiple factors preventing them from falling to zero. In and of itself, the Fed’s rate cut won’t cause rates on home loans to fall. Because mortgages are long-term loans, their interest rates tend to track long-term bond yields rather than short-term interest rates such as the federal funds rate. Indeed, this is not the first time the Fed has dropped its benchmark rate to zero. Rates were held at that level between December 2008 and December 2015 to help the U.S. economy weather the Great Recession.

Even through all of that, the median rate on 30-year fixed loans was 4.2% during that time period, noted Danielle Hale, Chief Economist with realtor.com. And even if Treasury yields were to fall to the same level as the federal funds rate, rates on home loans likely wouldn’t follow. “Because mortgage bonds are considered riskier than government bonds, they tend to be slightly higher than 10-year rates,” Hale said. “Even if the market spread were to return to normal, given where 10-year rates have been in the last week or so, we’re looking at average rates on 30-year fixed loans around 2.5% at best.”

Source: MarketWatch

The highs and lows of the first 3 months of 2020

March 24th, 2020

Believe it or not, we started the year quite smoothly. Yes, we were expecting some excitement due to the fact that we had a Presidential election coming our way. Little did we know that the primaries would take a back-seat to something much larger. It took just a few weeks to go from a smooth ride to one of the biggest roller coasters in history. If you are keeping score here is what we have thus far–

After hitting record highs this year, the stock market has had record one-day increases and decreases — right after one-another. Overall, we have seen a retrenchment of over 25% in the major indices reached within days after the latest moves by the Fed. Obviously, actions by the Federal Reserve have not calmed the markets. Not to be outdone, oil prices and interest rates have also plunged. Oil has moved down well over 50% from recent highs and now we have gas prices we have not seen for years. Refinances are soaring in response to lower interest rates, though mortgage rates have been very volatile. Finally, gold prices have been very volatile as well.

The Fed followed their emergency rate cuts with a press conference in which Chairman Powell said the Fed would be patient before lifting rates again. “We will maintain the rate at this level until we’re confident that the economy has weathered recent events and is on track to achieve our maximum employment and price stability goals,” Powell said. Even if we don’t have a huge pandemic here, our economy will be affected by the preventative measures in place. The only question is — how bad will it get? The good news is that we have one of the stronger world economies going into this crisis, giving us some cushion. Let’s hope the effects are fairly short-lived so we can get off this roller coaster quickly.

From The Origination Pro as written by Dave Hershman to which I subscribe and obtain this insightful and useful information that I pass on with permission to my readers of ABBA First Mortgage Inc.