ABBA First Mortgage News

Rates continue to rise after a short reprieve

March 3rd, 2021

For the week ending February 18, Freddie Mac announced that 30-year fixed rates increased to 2.97% from 2.81% the week before. The average for 15-year loans rose to 2.34% and the average for five-year ARMs rose to 2.99%. A year ago, 30-year fixed rates averaged 3.43%, almost 0.50% higher than today. “Optimism continues as the economy slowly regains its footing, thus affecting rates on home loans. Though rates continue to rise, they remain near historic lows. However, when combined with demand-fueled rising home prices and low inventory, these rising rates limit how competitive a potential homebuyer can be and how much house they are able to purchase,” said Sam Khater, Chief Economist, Freddie Mac.

Since February 18, we have see a dramatic increase in rates when on February 25, rates worsened by nearly 100 points, the worst deterioration this year!

 

Why are rates higher today than they were a couple of weeks ago?

February 19th, 2021

The following is the “simplified” answer according to a rate advisor* (for loan officers) that I listen to on a daily basis-

  • The new Biden administration and the $1.9 trillion stimulus plan that is likely to be passed in the next few weeks. This is the main reason rates have moved. The plan will be paid for with debt, meaning a glut of supply in Treasuries that will drive down prices and drive up yields. If Treasury prices fall, so do mortgage bond prices, which means rate sheet pricing (the rates from lenders to loan officers) gets worse too.
  • Many economists and industry pundits feel that Biden’s stimulus plan is too much money, and that it is going to overheat the economy. Although there are still millions of Americans who need help recovering financially from the lockdowns and response to COVID, the economy is doing much better than the media makes it sound, other than the labor market (and that is largely jobs in hospitality and travel).
  • Inflation is now a concern. After more than a decade of not being an issue, inflation is expected to kick in big time. Inflation is bad for rates, it drives them up. Biden’s stimulus plan is expected to be a catalyst to drive more inflation, and the Fed has said that they will not fight to keep inflation in check if it starts to rise, at least not for awhile.
  • COVID counts are dropping and the vaccine numbers are increasing. This will open the door for the economy to continue to recover, for consumer spending to continue to increase, and for people to get back to work.

*Abba First would like to thank the “Hammer” for his insight on how the markets react one with another and how that affects mortgage interest rates.  His daily communications are invaluable as he keeps his finger on the pulse for hundreds of loan officers that rely on his wisdom as to how to react to daily economic changes that affect the mortgage marketplace.

Rates have begun to spike up on Tues 2/16

February 17th, 2021

Although the following paragraph about rates remaining unchanged from the previous week which according to this article’s “calendar” runs from Thursday to Thursday, on the very next day, Friday the 12th of February, we saw the market take a turn and rates begin to slip.  Which leads to Tuesday when the Mortgage Backed Securities last 75 bps and the mortgage interest rates continued their worsening ways which began the previous week.  “NOW, before rates slip away from us, is the time to jump on the bandwagon if you haven’t done so already, and refinance your home while rates are still at all time lows”.  Give me a call at 910-332-0650 and let me guide you with an honest opinion of whether or not a new mortgage is the right thing for you and your needs at his time!

For the week ending February 11, Freddie Mac announced that 30-year fixed rates remained at 2.73%, the same as the week before. The average for 15-year loans fell to 2.19% and the average for five-year ARMs rose slightly to 2.79%. A year ago, 30-year fixed rates averaged 3.47%, almost 0.75% higher than today. “It’s a tale of two economies. The services economy remains in the doldrums, but the production side of the economy remains strong. New COVID-19 cases are receding, which is encouraging and that has led to a rise in Treasury rates. But the run-up in Treasury rates has not impacted mortgage rates yet, which have held firm. The residential real estate market remains solid given healthy purchase demand while implied real-time home price growth is high, due to the inventory shortage that is plaguing the housing market,” 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.

Rates continue to rise slowly

February 10th, 2021

ABBA First Mortgage of Wilmington NC continues to offer low rates to clients seeking to purchase new home homes in NC or TN despite the trends towards higher interest rates throughout the industry.  Refinancing rates continue to remain low although slightly higher than the rates offered for homes being purchased with specials and incentives by lenders to attract first time home borrowers and to keep borrowers from leaving their flock.  A simple phone call to 910-332-0650 requesting a quote for you to see what they can do for you is all it takes to see if ABBA First Mortgage can provide you with the lowest interest rate loan for your mortgage needs.

For the week ending February 4, Freddie Mac announced that 30-year fixed rates remained at 2.73%, the same as the week before. The average for 15-year loans rose one tick to 2.21% and the average for five-year ARMs fell slightly to 2.78%. A year ago, 30-year fixed rates averaged 3.45%, almost 0.75% higher than today. “Rates on home loans remained flat this week and near record lows, signifying an economy that continues to struggle. This rate environment is advantageous for those who are looking to refinance in order to strengthen their financial position. While many have already refinanced, the evidence suggests that upper income homeowners have taken advantage of the opportunity more so than lower income homeowners who could stand to benefit the most by lowering their monthly mortgage payment,” said Sam Khater, Chief Economist, Freddie Mac.

A little bit lower this week after a little bit higher last week

February 3rd, 2021

For the week ending January 28, Freddie Mac announced that 30-year fixed rates fell to 2.73% from 2.77% the week before. The average for 15-year loans also decreased to 2.2% and the average for five-year ARMs remained at 2.8%. A year ago, 30-year fixed rates averaged 3.51%, more than 0.75% higher than today. “As the market reacts to a new administration in Washington and COVID-19 driven economic malaise, mortgage rates continued to decrease this week, just slightly. Even as house prices increase at the fastest rate we’ve seen in years, competition to buy is strong given the low inventory that exists across the country. The fact that there are not enough homes to meet demand is going to be an ongoing issue for the foreseeable future,” 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.

The Feds met and with no economic improvement in sight- mortgage interest rates should remain low.

January 27th, 2021

The US Federal Reserve Bank announced its key interest rate decision at the end of its meeting today. Fed chairman, Jerome Powell, also offered some indication as to the Fed’s future decisions through the year.

In a widely expected move, the Fed left the target for the federal funds rate unchanged at a range of 0%-0.25%. The committee stated it is seeking to achieve and maintain maximum employment and inflation at the rate of 2% in the long run. The committee has stated, however, that it will aim to achieve inflation moderately above 2% for some time, so longer-term expectations remain anchored at 2%.

“The COVID-19 pandemic is causing tremendous human and economic hardship across the United States and around the world. The pace of the recovery in economic activity and employment has moderated in recent months, with weakness concentrated in the sectors most adversely affected by the pandemic,” a Press release announcing the decision read. “Weaker demand and earlier declines in oil prices have been holding down consumer price inflation. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to US households and businesses.”

The Press release stated the Fed will continue its purchases of bonds and mortgage backed securities at a rate of $80 billion and $40 billion per month respectively. This comes after some noise from Fed members about slowing these quantitative easing measures which, in the past, have provoked tapering in the markets.

“The path of the economy will depend significantly on the course of the virus, including progress on vaccinations,” the release read. “The ongoing public health crisis continues to weigh on economic activity, employment, and inflation, and poses considerable risks to the economic outlook.”

Rates begin to rise

January 22nd, 2021

Although rates are rising, ABBA First Mortgage has continued to offer some of the lowest rates in Wilmington NC despite the sudden change of direction in the MBS.

For the week ending January 14, Freddie Mac announced that 30-year fixed rates rose to 2.79% from 2.65% the week before. The average for 15-year loans also increased to 2.23% and the average for five-year ARMs rose sharply to 3.12%. A year ago, 30-year fixed rates averaged 3.65%, more than 0.75% higher than today. “As Treasury yields have risen, it is putting pressure on mortgage rates to move up. While rates on home loans are expected to increase modestly in 2021, they will remain inarguably low, supporting homebuyer demand and leading to continued refinance activity. Borrowers are smart to take advantage of these low rates now and will certainly benefit as a result,” 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.

Rates on the rise since Election Day in Georgia

January 15th, 2021

Rates hit another low last week, however this data did not reflect the increase which took place later in the week.  For the week ending January 7, Freddie Mac announced that 30-year fixed rates fell two ticks to 2.65% from 2.67% the week before. The average for 15-year loans also decreased to 2.16% and the average for five-year ARMs rose to 2.75%. But on the day of the election in Georgia as Democrats gained two more seats in Congress, there has been a reversal in rates that we haven’t seen since President-elect Joe Biden won the election on November 4th 2020.  Rates have worsened to the highs that we saw back in July of 2020, giving back all the betterment that we’ve enjoyed these 7 months.  A year ago, 30-year fixed rates averaged 3.44%, approximately 1.00% higher than today. “A new year, a new record low mortgage rate. Despite a full percentage point decline in rates over the past year, housing affordability has decreased because these low rates have been offset by rising home prices. However, the forces behind the drop in rates have been shifting over the last few months and rates are poised to rise modestly this year. The combination of rising rates and increasing home prices will accelerate the decline in affordability and further squeeze potential homebuyers during the spring home sales season,” said Sam Khater, Chief Economist, Freddie Mac.

May I suggest that if you are considering refinancing or purchasing a home that you give ABBA First Mortgage a call soon as rates are still amongst the all time lows in the history books of mortgage rates since the inception of recording interest rates for mortgages.  Call 910-332-0650 and speak with Rich Biagini for all your mortgage financing needs.

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 have held steady two weeks in a row but are poised to go up before possibly going lower.

December 17th, 2020

For the week ending December 10, Freddie Mac announced that 30-year fixed rates remained at 2.71% from the week before. The average for 15-year loans also remained the same at 2.26% and the average for five-year ARMs fell to 2.79%. A year ago, 30-year fixed rates averaged 3.73%, more than 1.00% higher than today. “Rates on home loans remain at record lows, resisting their typical correlation to Treasury yields, which have recently been moving higher. Mortgage spreads – the difference between rates on home loans and the 10-year Treasury rate – are declining from their elevated levels earlier this year. Although today’s spread is about 1.8 percent and still has some room to move down if the 10-year Treasury continues to rise, it’s encouraging to see that the spread is almost back to normal levels,” said Sam Khater, Chief Economist, Freddie Mac.

Always check NC mortgage rates at www.abbafirst.com for the up to the day rate for Wilmington NC rates.  We offer low mortgage rates for Conventional, FHA, VA, USDA purchases or refinances and work with borrowers whether seasoned purchasers or first time home buyers.  Please call us at toll free at 866-676-3349 or email Rich at richsr@abbafirst.com

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.

ABBA First posts lowest rates ever for purchases!

December 9th, 2020

When browsing through several wholesale lenders to choose between for the lowest rates from across the country, ABBA First is excited to be able to post rates that are lower than anything that they’ve not only ever posted, but that they’ve ever seen.  If you are considering purchasing a home, NOW is the time to do it!  And refinance rates aren’t that far behind the lowest rates that offered on their website for those that are purchasing.  There are no “catches” but of course you must be a qualified borrower to obtain the best rates being quoted.  Please call 910-332-0650 and see what rate you are eligible for and allow ABBA First to meet your needs and desires with the lowest rate and terms (fees) available in the market based upon your qualifications.  Rich and Maureen Biagini are happy to work with you and for you to serve you well and treat you as they themselves would want to be treated.  Call 910-332-0650 or go to www.abbafirst.com and see for yourself the wonderful opportunity that you too may be able to take full advantage of.