Good Monday Morning!

Last week, mortgage interest rates began ticking up.  The result was an immediate decline in the number of new mortgage applicatons.  This shows just how sensitive our current market is to mortgage rates.  The question at this time is whether we will see a continuation in rates increasing, whether they stay put or decline back to the historic low levels they have been at.  The next several weeks may show us how 2021 trends in regards to mortgage rates and how the housing market is effected.  The following is an article on mortgage current rates from the "Wall Street Journal".

Mortgage rates reached their highest level since November last week, cooling off home purchase and refinance applications ahead of the all-important spring selling season.

The average rate on the 30-year fixed-rate mortgage rose to 2.81% in the week ended Feb. 18, the highest since the second week of November, according to mortgage-finance giant Freddie Mac. A measure of mortgage applications fell 11.4% over the same week, according to the Mortgage Bankers Association.

Improving Covid-19 vaccination rates in the U.S. and expectations of a large federal stimulus package in the coming weeks drove benchmark 10-year Treasury note yields, which are closely tied to mortgage rates, to their largest weekly gains in more than a month last week. Demand in safe-haven assets such as government bonds weakens when investors feel optimistic about the economy.

“Higher rates are a signal of expectations of faster growth and a stronger job market ahead,” said Mike Fratantoni, the MBA’s chief economist. “This last week, rates have turned faster than many people had anticipated.”

Rising rates sometimes prompt borrowers to put their mortgage plans on hold for a few weeks, Mr. Fratantoni said. Measures of purchase and refinance activity fell 11.6% and 11.3%, respectively, in the week ended Feb. 19, according to MBA data.

If mortgage rates begin to increase at a faster pace, some borrowers could be discouraged from attempting to buy a home during the crucial home-selling months of March through June. In a typical year, more than 40% of annual home sales are made during this period, according to the National Association of Realtors.

Still, rates remain historically low, and more people are applying for purchase mortgages and refinances than at the same time in 2020. Last year was a banner one for the housing market, thanks in large part to mortgage rates, which fell below 3% for the first time last summer.

Mortgage lenders originated a record $3.6 trillion worth of mortgages last year, according to the Mortgage Bankers Association, an increase of more than 50% from 2019. Refinances accounted for about 59% of that volume. With the 30-year rate near 2.81%, between 16.7 million and 18.1 million Americans could lower their monthly mortgage payments through a refinance, according to mortgage-data firm Black Knight Inc.

Lissette Gomez will close this week on a new loan that lowers the mortgage rate on her Cleveland-area condo to 2.75% from 4.125%. Ms. Gomez, a special-education teacher, said she decided to refinance after she watched her boyfriend get a much lower rate on his mortgage.

Have An Awesome Week!

Stay Healthy! Stay Safe! Trust in God!

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AND HERE'S YOUR MONDAY MORNING COFFEE!!