Mortgage rates back down to all-time lows

After increasing to multi-year highs at the tail end of last week home loan rates have started the week back down to all-time lows.  Watch this weeks video which includes an update on mortgage rates, my outlook on housing prices, and some initiatives that Fannie Mae is taking to help support homeowners and the housing industry:

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Why mortgage rates are increasing in the face of massive stock declines

Under normal circumstances we expect mortgage rates to improve when stocks decline.  You can CLICK THIS LINK to learn why.

However, as we can all attest these are anything but normal circumstances.  Despite the US stock market experiencing some of the biggest sell-offs in history mortgage rates are actually increasing off all-time lows.  Why the change in dynamic between stocks and home loan rates?  I have recorded a special video to explain the four factors which are turning the relationship upside down:

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A special video Rate Update

Given the extraordinary circumstances we are currently experiencing I have prepared a special video ‘rate update’ for today. 

Please take 4 minutes to watch this special message below:

Current Outlook: Floating

Mortgage rates at all-time low levels

Home Loan Rates

Mortgage rates are at all-time low levels.  We have recommended a floating position the past couple weeks and that position has proved beneficial.


The financial markets are experiencing extreme volatility.  Yesterday the Dow Jones Industrial Average had its biggest one day drop ever……this morning US stocks are rallying.

Mortgage lenders are seeing interest rates fluctuate .125%-.25% intra-daily!

US 10-year treasury note

On February 21st the yield on the US 10-year treasury note, which mortgage rates tend to follow was 1.50%.  Yesterday the yield touched .40% before moving higher.  Yields have never been this low.  Some analysts think they may go even lower.

Normally when the yield on the US 10-year treasury note moves up or down by .25% we expect mortgage rates to follow suit.  However, there is currently a disconnect between mortgage rates and treasury yields because lenders are over capacity.


There is currently over $10 trillion of mortgage debt held by homeowners in the US.  Estimates are that 50%+ of those loans would benefit from refinancing into today’s rates.  In 2019 the mortgage industry originated less than $2.0 trillion of mortgage volume.  Mortgage rates are not likely to decrease further until additional lending capacity is available.

Are you thinking of refinancing?  Watch THIS VIDEO.

The week ahead

Although there are still economic reports being issued the financial markets are reacting entirely to developments on the spread of the Coronavirus.  As mentioned earlier mortgage rates are being driven by lenders ability to absorb additional loan volume.

Given that rates are at all-time low levels I am recommending a locking bias.

Current Outlook: Locking bias

Mortgage rates at all-time lows, spread of fear may press them lower

Home Loan Rates

In last week’s update we took a “floating” stance because we thought fear over the coronavirus would continue to grow.  That seems like an understatement now.

Mortgage rates established new all-time lows on Thursday last week and remain at all-time low levels today.

The Coronavirus

The Coronavirus continues to spread across the US and other countries outside of China.

Experts believe more US citizens currently have the Coronavirus than is being reported.The US is still shipping reliable test kits to medical officials around the country.  Once those are deployed I expect the reported numbers of cases to rise significantly.

The spread of the virus will discourage consumers from spending, investing, and generating economic activity.  Therefore, many analysts think this could trigger an economic recession.  This is the primary reason why stocks are faltering and interest rates are falling.

The Fed

Earlier this morning the Federal Reserve cut short-term interest rates by .50% to try and combat the economic fallout from the Coronavirus.

The Fed controls the Federal Funds Rate which is not directly correlated to mortgage rates.  Mortgage rates are the same today as they were yesterday before the Fed cut rates.

The week ahead

It’s the first week of March so we’ll get a fresh jobs report this Friday.  However, the financial markets are not focused on the economic calendar given the significance of the coronavirus story line.

I expect volatility to continue over the course of the next few days and weeks.  The bottom line is interest rates may very well continue to decrease in the weeks ahead.

Current Outlook: Floating

Mortgage rates at all time lows. Might they go even lower?

Home Loan Rates

Mortgage rates are presently at all-time lows which were originally established in 2012 and again in 2016.  Could home loan rates go even lower?

The Coronavirus

Although new cases of the Coronavirus are slowing in China the number of people infected in other countries is growing.  Furthermore, there is fear that some countries are underreporting the true number of citizens infected with the virus.

Fear over the spread of the illness is now having a significant impact on financial markets around the globe.

Impact on Financial Markets

On Monday US & European stock markets fell by ~3% and today they are off over 1%.  Japan’s stock market fell 3.3% on Monday.

When stocks decline it tends to drive capital into the bond market which pushes interest rates lower.  The US 10-year treasury note is now trading at 1.322%, an all-time low) and the yield curve is now inverted.

An article published by Bloomberg reported that unless economic activity resumes 66% of small to medium sized businesses inside China are poised to run out of cash within two months.

Home Prices

According to the S&P CoreLogic Case-Shiller Home Price Index appreciation picked up nationwide at the end of 2019.  The report showed that homes increased by 3.8% during 2019.

With interest rates hitting all-time lows I expect home price appreciation will remain healthy for the foreseeable future.

The week ahead

There is plenty of significant economic data being reported this week.   Specifically, I will be paying attention to New Home Sales (Wednesday), Gross Domestic Product (Thursday), Pending Home Sales (Thursday), and Personal Income (Friday).

However, news regarding the Coronavirus is the primary driver of interest rates at this moment.  If it appears that the illness continues to spread then I expect stocks to continue to falter and mortgage rates to improve further.

Current Outlook: Floating

Mortgage rates remain low despite unfriendly news

Home Loan Rates

Mortgage rates are mostly unchanged from last week despite economic news which has not been rate friendly.

Jobs Report

Last Friday’s all-important jobs report showed that 291,000 new jobs were created during the month of January.  Analysts had been expecting a figure closer to 160,000 new jobs.  

Normally when the jobs report comes in hotter than expected it causes rates to rise but they barely budged following the release.

The Coronavirus

Fear over the Coronavirus may be keeping a lid on mortgage rate increases.  There are now over 40,000 confirmed cases.  

News reports this morning suggest the spread of the virus may be slowing which is positive news for the economy but ultimately may unwind the “flight-to-safety” in the financial markets which has helped interest rates hit recent lows.  

If the spread of the virus begins to decelerate then I expect mortgage rates to increase modestly.

The Fed

Fed Chairman Jerome Powell testified in front of lawmakers earlier today that the Fed was monitoring the Coronavirus outbreak closely but that it was too soon to measure the economic impact it is having.  

The financial markets currently think there is an 80% chance that the Fed will cut short-term interest rates at least once during 2020.  Although the Fed does not directly control mortgage rates the comments they make can influence them.

The week ahead

The weekly economic calendar features plenty of scheduled Fed speeches.  In addition, we’ll see the Consumer Price Index on Thursday as well as Retail Sales and Consumer Sentiment on Friday.  

From a technical perspective I think borrowers have more to lose than to gain so will maintain a locking bias.

Current Outlook: locking

Mortgage rates shift and appear to be moving higher

Home Loan Rates

Despite the fact that the Coronavirus continues to spread mortgage rates appear to have hit an inflection point and are moving slightly higher.

Virus in China

According to reports there are now over 20,000 confirmed cases of the deadly Coronavirus (twice as many as this time last week).  The disease continues to pop up across the globe but is primarily concentrated in China.

Home Loan rates have touched multi-years lows as fear has spread into the financial markets encouraging investors to seek “safe-havens” including the US fixed income markets.  The additional demand has driven interest rates lower.

Stock Market

US stocks are rallying today as investors bet on the long-term resilience of the global economy.  The Dow Jones Industrial Average is up over 1.5% (430 points) in early trading.  When stocks rally it tends to put upward pressure on interest rates.

The Fed

As expected the Fed left rates unchanged when they met last week and their monetary policy comments were mostly unchanged from their previous meeting.  At this point, I do not expect the Fed to hike or cut interest rates in 2020.  Of course, this does not mean that mortgage rates will remain flat because the Federal Funds Rate does not directly impact home loan rates.

The week ahead

The economic calendar heats up this week.  The most important release will come Friday when we get the all-important jobs report.  Analysts are currently expecting 165,000 new jobs to be reported for January.  There are also a couple Fed officials giving speeches throughout the week.

From a technical perspective it appears that interest rates may have bottomed out on Friday of last week and will start trending higher.  I will shift to a locking bias but if the spread of the Coronavirus accelerates then rates will likely dip again.

Current Outlook: locking

Fear over Coronvirus drives home loan rates lower

Home Loan Rates

In the past 10 years there are only three times when mortgage rates have been lower than they are today.  Interest rates continue to benefit from a “flight-to-safety” in reaction to the Coronvirus outbreak.

Virus in China

Over 4,500 cases of the Coronvirus have been reported in mainland China.  There is still a lot of fear about the potential for the illness to spread and cause more severe health impacts around the globe.  Thus far there have been less than 100 known cases of Coronvirus outside of mainland China.

Should the outbreak become more severe then we  may see rates go even lower.  However, if the virus appears to be contained then I would expect mortgage rates to increase slightly.

Stock Market

US stocks are off about 2% of recent highs which has pushed capital into “safer” havens including for mortgage-backed bonds which has helped drive mortgage rates lower.

Housing News

Earlier today the Case Shiller Home Price Index was released.  The report showed that over the past 12 months home prices in the 20-city composite, of which Portland is included, increased by 2.6%.

Yesterday we got numbers for new home sales.  Although the number of new home sales declined in December from the prior month, they were still up 10% for 2019.  Given that there is still an acute shortage of housing in many of the major west coast metropolitan areas an increase in new home sales is welcome news.

The week ahead

It’s Fed week which means we’ll hear from the Chairman Powell on Wednesday.  The Fed is not expected to change its tune regarding monetary policy but we always need to stand guard for changes to their wording.

Current Outlook: floating


2020’s Housing

It’s a new year and a new decade! In this video I review the Portland, Oregon housing statistics and what we should expect to see over the next 10 years. Hint, hint…. home-ownership rates and housing demand will likely increase!

Questions, comments? We would love to hear from you!