<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=1955936548054264&amp;ev=PageView&amp;noscript=1">
 

Market Watch: September 2018

< Back to Articles | Time to Read: 5 minutes

While much of 2018 has been an up and down roller coaster with interest rates, we know the overall long-term trend with mortgage interest rates is for rates to move higher. The summer months were fairly calm with rates slowly moving up and down a small amount. But that gentle up and down trend stopped at the beginning of September. Rates seem to be rapidly rising and have so far reached their highest levels of 2018. The primary reason for this is the strong economy. 

At a very simple level, bad economic news brings lower rates and good economic news brings higher rates. We see this in very small ways day to day. For example, the president will announce big tariffs, worldly concerns, or news that appears bad for America economically, and rates improve a little. But when we have a low unemployment rates, the mortgage interest rates seem to get a little worse. Here’s the big picture: there’s no denying the American economy is doing extremely well right now.

There are a couple of pieces of data that help us track what rates are doing. For the consumer, like you, the most readily available is the 10-year treasury. While not directly tied to mortgage rates, it’s a good predictor. As treasury yields go higher, mortgage rates will likely go higher. Let’s look at the 10-year treasury yield from August 24, 2018—it was down around 2.81.  A few weeks later on September 19, it reached 3.08 and appears to be heading higher.*

10-yr treasury graphic for Joshua Phillips blog article

The second piece of data to look at is Mortgage Back Securities. This would most directly reflect mortgage rates. There are two important things to know when looking at this chart:

  1. Red is bad and green is good.**
  2. The lower the price goes, the higher rates are going.

 As described earlier, you can see the subtle up and down fluctuations throughout the summer, then you’ll see the more rapid drop in security prices over the last 4 weeks.

MBS NUmbers for Joshua Phillips Blog Article

We can’t predict the future, but this does give you a sense of what is happening in the market. If you’re under contract or about to go under contract and ready to lock your rate, one option that is always available is to “float” your rate. There is certainly a risk in doing this as pricing could just continue to get worse but there’s also a good possibility that we will hit some sort of bottom and have some degree of bounce back. It just depends on market conditions and day-to-day reports and world news. 

It’s important to keep things in perspective:  A change of rate of 0.125% is often only a $10-$20 change in your monthly payment. And if you have a long-term perspective on interest rates, they are still historically low and reasonably good!

If you’re going under contract and ready to look at locking, we’re here to discuss rates and options. If you’re still searching for a home, just be aware of the rate movements. And as always, reach out to us with any questions you may have!

Resources: *CNBC.com ** Mortgage News Daily: http://www.mortgagenewsdaily.com/mbs/

Written by: Joshua Phillips, Branch Manager of The Phillips Team at Churchill Mortgage.

Are you buying a home or refinancing?

Where are you planning to buy a home?

Please Select a State

What is your full name?

Please Enter a Name
Please Enter a Last Name

What is your email address?

Please Enter a Valid Email Address
  We won't share your information.

Next, we need to verify a phone number.

Enter a Valid Phone Number
Please Select a Message Type

Enter your phone number and we'll text you a 6-digit security code to verify it's you. Standard texting and data rates may apply. For more information, read our Privacy Policy.

Enter the 6-digit code sent to your device.

 Code sent to +1234567890

Finally, how did you hear about us?

Please Select an Option

By submitting this form, I/we agree to your Privacy Policy Terms of Use and authorize Churchill Mortgage Corporation and/or their Preferred Provider for our area and/or The Churchill Agency to receive the above information to assist in obtaining a home loan.

I/we also authorize Churchill Mortgage Corporation, The Churchill Agency and/or their Preferred Provider for our area to contact us regarding but not limited to mortgage and insurance services and products via telephone, mobile phone (including through automated dialing), and/or email, even if telephone numbers or email I/we provide are on any Do Not Call/Contact Registry, such as corporate, state, or the National Do Not Call Registry. The submission of this form does not constitute in any way a formal loan application or a commitment for a loan. By communicating with us by phone, you consent to calls being recorded and monitored. By participating, you consent to receive text messages sent by an automatic telephone dialing system. Consent to these terms is not a condition of purchase.

Your answer will NOT negatively affect your mortgage application. Your answer does not mean the Lender or Other Loan Participants agree to communicate or provide documents to you in your preferred language. However, it may let them assist you or direct you to persons who can assist you. Language assistance and resources may be available through housing counseling agencies approved by the U.S. Department of Housing and Urban Development. To find a housing counseling agency, contact one of the following Federal government agencies. U.S. Department of Housing and Urban Development (HUD) at (800)569-4287 or www.hud.gov/counseling

Es probable que su transacción de préstamo hipotecario suceda en inglés. Por medio de esta pregunta, solicitamos información para determinar si existen comunicaciones disponibles a su servicio, en su idioma preferido. Sírvase tener en cuenta: posiblemente NO hay comunicaciones disponibles en su idioma preferido.

Thank You!

Thank you for choosing Churchill Mortgage to help you with your home loan needs!

Our team is already hard at work connecting you with your Home Loan Specialist. Rest assured that we've received your request and will be in touch with you shortly.

social proof logos

Already working with someone at Churchill?

Find Your Home Loan Specialist

Please Select a Loan Officer