The Fed announced a 0.5% cut in the Fed Funds Rate at the conclusion of their meeting this week. Many people would then assume that mortgage rates would drop as well, but mortgage rates actually went up a little bit, after the big Fed announcement. Mortgage Backed Securities (the bonds that determine mortgage rates) had long ago priced in cuts by the Fed in the last quarter of this year, and there were some comments in Fed Chairman Powell’s post meeting press conference that were seen as somewhat negative towards longer term bonds, such as mortgages.
So what do we need to see for mortgage rates to go even lower?
Economic and labor date to continue to get softer – the labor market to continue to get weaker and inflation to continue to move towards 2.0% (it is currently 2.5%).
The Fed getting more dovish in their statements and speeches – the more Fed officials talk about their concern in keeping the U.S. economy out of a recession, the more the bond market will see inflation as under control and the Fed committed to keeping rates lower for longer.
Mortgage spreads getting better – mortgage rates have always moved in a relationship to the 10-year Treasury, but the spread between the yield in the 10-year treasury and mortgage rates is always changing. We want the spread between the 10-year Treasury and mortgage rates to get tighter, as it is currently about 2.5%. If it moved closer to the 1.5%-2.0% historical norm, then rates would be 0.5%-1.0% lower.
The next Federal holiday is Columbus Day on Monday, October 14, 2024. All Federal, State, and County offices will be closed this day. There will be no fundings or recordings on this day. Following that, Veteran’s Day is November 11th and Thanksgiving is November 28th. Keep that in mind for contract closing dates.
Appraisal Turn Times: Vancouver/Portland Metro Area: 4-6 days; Cowlitz County: 6-8 days; Lewis County: 7-9 Days; Skamania County: 8-10 days.
Today’s Rates for the Home Advantage Down Payment Assistance Loan with the WSHFC. Down Payment assistance with Home Advantage is 3% - 5% of the loan amount, depending on the pricing/program chosen. I am a Commission-trained Loan Officer authorized to work with the WSHFC. I’m happy to meet with your clients to see if they are eligible for the Home Advantage program or any of the other down-payment assistance programs available with the WSHFC.
Mortgage News Daily fixed rate index for 9/20/2024
30-year Conventional – 6.15%
15-year Conventional – 5.59%
30-year Jumbo – 6.38%
30-year FHA – 5.70%
30-year VA – 5.72%
Have a great weekend!
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