Mortgage Rate Update
Here is this week's update on mortgage rates from our team lender Brian Taylor.
No real change in the interest rate market this week. Rates, though still historically great, continue to feel pressure from the COVID-19 virus and the impact it’s having on the economy. As states consider reopening their businesses, the disruption from this virus to the world economy continues to be unprecedented. Remember, the start of this economic downturn was not a financial issue, but rather a medical crisis caused by COVID-19. Subsequently, it has caused a major strain on the world economy but there was no underlying fundamental financial issue. Of course now, we will need a lot of help to emerge from the financial troubles (see the small business stimulus plan). Additionally, the unemployment rate in the US has jumped, and some are predicting we’ll hit an unemployment rate of 16% or higher. That is astounding, and terrible news for the economy. We also expect the next couple of months to continue bring poor economic news. Forbearances are increasing dramatically. Already, there are over 3.4 million loans in forbearance. So what does this mean for rates? We should continue to see rates in a narrow band (barring any significant change in economic data projections). Lenders will be very careful with their mortgage rates, looking to manage the economy and their self-preservation, as well as monitoring their pipeline volume to ensure they can close all loans in a reasonable timeframe. Stay patient. It’s a choppy market, but opportunity does come each week.