Market Update: May 18th, 2020

Hi Bruce Woodburn with CrossCountry Mortgage, with your weekly mortgage market notification. I want to give you a little bit of information. And this is all really important for my real estate agents builders and clients that are looking to buy or refinance a home or just anybody that really wants to know what’s exactly going on in the mortgage market. And I’ll tell you, it’s important whether you are, or you are not in a position or wanting to purchase or refinance because my industry directly impacts everyone else’s industry. When I say my industry I mean the housing industry itself. When the housing industry is going really well. You guys are all doing really well. Everybody’s buying cars getting home improvements. When my industry slows down everybody slows down.

Now fortunately for us. We’ve seen a amazing surge in business from purchase transactions. Refinances we figured we’re going to be high, but purchase transactions; I had no idea they were going to be as many as there are and I know a lot of Lenders and Real Estate Agents are seeing record numbers. If you are a Real Estate Agent and you’re not experiencing record numbers, I think you just need to dig a little deeper to find some of those clients cause they are out there and they want to buy. Almost every transaction I saw last week that I was working with a buyer on was in  multiple offer situations. So, that means it is a huge demand, and it’s still a seller’s market.

Let’s talk about just a few things that are going on with the Fed market, and how that impacts you. First of all, mortgage bonds are trending downward. It’s not what you want to hear, because that means interest rates are going up, we want to see mortgage bonds up. And, of course, we all want to see the stock market go up quickly. Usually when the stock market goes up interest rates are going to go right up along with it. And that’s likely what’s going to happen.

So, the Fed chair Jerome Powell was on 60 minutes last night saying that he could see likely a great depression,  with unemployment numbers like Q2 gross domestic project could sink by 20 to 30%. However Powell did say that he had a bright outlook ahead saying, “So, in the long run, I would say that the US economy will recover. We’ll get back to the place where we were in February, we’ll get to an even better place than that. I’m highly confident of that.”

Now, that sounds to me like he said something and then was backtracking on it a little bit. If you can read between the lines on that one. However, I do believe that if we get our people back to work. Then we will recover from this, I’m a strong believer in that, but it’s gonna take getting back to work. And that takes all of us to have a great deal of responsibility on maintaining that social distancing, but getting our businesses, open. Let’s get through these different phases, so we can keep the virus, at bay and really move forward in our businesses.

A couple of other things that we have on the news, mortgage backed securities were losing ground on the 10 year yield.
And they were higher up to 2.67% well above the support level of .60% that support has been a bear. So, now, something else, the treasury bill will be debuting the 20 year treasury bond on Wednesday of this week, and with a huge amount of supply coming in, in the near future to fund a massive stimulus program enacted by Congress we shall see how the bonds do when it comes to that insurgence of money into it but, hopefully it helps our interest rates a little bit.

And what are happening with interest rates? Well, you’re starting to see them tick back up. And if you guys listen to me on my radio show on 96.5 fm.,  The Loan Arranger WDBO, you will hear me talk about that. I have been telling people for now over a month that you’re going to see rates start taking up and you did. I have been telling my friends to refinance now if you want to do a cash out refinance, because there’s a lot of companies big banks that are not even doing cash out refinances right now, but Fannie and Freddie imposed additional restrictions on them, which made it more difficult. when I say more difficult more expensive for you if you’re planning on doing a cash out refinance. But, it doesn’t mean it’s not the right thing to do. You need to investigate that, if you’re loaded up with a bunch of consumer debt, give me a call. We can always look through to see what’s going to help you fix that moving forward in the future.

There’s your mortgage market notification update for this week of May the 18th. Bruce Woodburn CrossCountry Mortgage 30 plus years in the business, and always there to help guide you through the process so that you are well informed as a consumer, or as a professional in the Real Estate or building environment. So thanks again for the opportunity to help you, and we will see you next week, same time, same place for the mortgage market notification. Have a great day.

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