Mortgage rates continued to move lower this week as financial markets digested the latest geopolitical activity, but a number of factors could prompt investor fears to rise again this week.<\/p>\n
Mortgage News Daily reported Monday that 30-year fixed rates averaged 6.30%. That was down 9 basis points from a week earlier and 57 bps lower than a year ago. MND based its rates on best-execution pricing from lender rate sheets.<\/p>\n
At HousingWire<\/strong>\u2018s Mortgage Rates Center<\/a>, 30-year conforming loan rates averaged 6.42% on Tuesday, down 5 bps from one week ago<\/a>. Rates for 30-year loans through the Federal Housing Administration<\/strong> (FHA) dropped 3 bps to 6.15% and rates for jumbo loans fell 4 bps to 6.29%.<\/p>\n The recent downward movement in rates is being driven in part by a ceasefire in the U.S.-Iran conflict<\/a>, but that agreement is set to expire Wednesday. Multiple outlets say that an extension of the ceasefire is unlikely, with The Associated Press reporting<\/a> that mediators are meeting in Pakistan and leaders of both countries are prepared to resume military action. Interest rates could rise again if a truce does not materialize.<\/p>\n While the Federal Reserve<\/strong> meets again next week, a rate cut is all but off the table. Investor sentiment and rates are more likely to move in tandem with Tuesday\u2019s Senate<\/strong> hearing for Kevin Warsh<\/a> \u2014 President Donald Trump<\/a>\u2018s choice to replace Jerome Powell as the central bank\u2019s chair. The Fed\u2019s two-day meeting that concludes April 29 will be Powell\u2019s last in charge.<\/p>\n Cooling rates during the ceasefire have had a positive impact on home purchase and refinance demand, with the Mortgage Bankers Association<\/strong> (MBA<\/a>) reporting last week that total applications were up 1.8%<\/a> on a weekly basis, led by a 5% jump in refi applications.<\/p>\n \u201cMortgage applications increased modestly as a decline in mortgage rates led to a boost in activity for the first time in five weeks,\u201d Bob Broeksmit<\/a>, the MBA\u2019s president and CEO, said in a statement. \u201cRefinances were up on a weekly and annual basis, but purchase activity remains subdued, with applications below year-ago levels for the second straight week as economic uncertainty and affordability pressures continue to affect homebuyer demand.\u201d<\/p>\n Kyle Bass, production business manager at Refi.com<\/strong> \u2014 an affiliate of Mortgage Research Center<\/strong> and Veterans United Home Loans<\/a><\/strong> \u2014 said that the \u201cmodest\u201d declines in rates have been enough to catch the attention of prospective borrowers.<\/p>\n \u201cHomeowners are beginning to re-engage after a period of waiting on the sidelines. This isn\u2019t a surge driven by urgency, but more of a measured return, where borrowers are reassessing their options and paying closer attention to how current rates compare to what they have today,\u201d Bass said in a statement.<\/p>\n \u201cAt\u00a0Refi.com, we\u2019re seeing that shift play out in real time Borrowers aren\u2019t rushing to act, but they are becoming more aware of the opportunity. If rates continue to trend in this direction, even gradually, this kind of early re-engagement can build into more meaningful refinance<\/a> activity in the weeks ahead.\u201d<\/p>\n This week\u2019s HousingWire Housing Market Tracker<\/a> also shows positive growth in pending home sales, a leading indicator for closed transactions. Nationally, pending sales were up 6.4% week over week and 2% higher year over year.<\/p>\n On Tuesday, monthly data from the National Association of Realtors<\/strong> (NAR) showed more mixed results for March, with pending sales up 1.5% monthly but down 1.1% annually.<\/p>\n \u201cDemand sensitivity to mortgage rates is greatest among first-time buyers, particularly younger buyers,\u201d NAR chief economist Lawrence Yun said. \u201cAs a result, boosting supply and new-home construction<\/a> should focus on smaller, more affordable homes.<\/p>\n \u201cA good number of markets in the South experienced price cuts over the past year but recorded the strongest job growth,\u201d Yun added. \u201cThat combination should lead to stronger housing market activity in the South this year.\u201d<\/p>\n Bright MLS <\/strong>chief economist Lisa Sturtevant cautioned last week that spring housing market conditions appeared to be something of a \u201ctoss-up.\u201d<\/p>\n \u201cThe ceasefire announcement earlier this month may have temporarily eased mortgage rates; however, right now, the outlook for the spring market is still unclear,\u201d Sturtevant said. \u201cMortgage rates are\u00a0probably going\u00a0to remain volatile as there is still significant uncertainty about a long-term resolution of the conflict with Iran. In addition, inflation in March rose to 3.3%<\/a> and this higher inflation, which was tied heavily to energy and global shipping, means lower rates are unlikely in the short term.\u00a0<\/p>\nMeasured return to the market<\/h2>\n
\u2018More careful in pulling the trigger\u2019<\/h2>\n