As Fear Increases, Rates Decrease

As the COIVIS-19 has raised significant fear in the Charleston area, it has yet to affect our Housing Market. There has yet to be a drop in properties going Under Contract, with 408 New Properties Under Contract last week!

I thought I'd give everyone some positive news in this uncertain time. Even though rates are fluctuating on a DAILY BASIS, they remain low and are not directly tied to Federal Rates. Mortgage Rates are tied to 10-year Treasury Yield Rates but are not quite following the trend of these rates. Todd Huss from Prosperity Mortgage explains why, "While mortgage rates generally track with 10-year Treasury yields, they are actually bundled in a different type of bond, a mortgage bond – makes sense right? While these bonds (mortgage and treasury) usually move mostly together, the COVID-19 driven market fear caused many buyers to buy the "safer" US 10 year Treasury bond instead of mortgage bonds. When there are a lot more buyers than sellers for treasury securities, this drives price up and rates lower – just like a house! So, while mortgage rates typically follow the 10-year treasury, fewer buyers in mortgage bonds vs. 10 year Treasuries have forced rates to buck that trend."

The Federal Government has stepped up and announced they sill step up and buy mortgage bonds at these lower rates to keep money flowing into the mortgage market. This could, in turn, keep rates down or possibly push them down even lower.

However, none of this is a guarantee and continues to change several times a day. Lisa Wood from Finance of America says, "Rates are volatile. When your Lender says lock, you do it and trust their judgment. In all this craziness, we are pushing through record amount of volume. "She positively adds, "We can expect economic repercussions from all of this, which will likely keep rates low throughout the Summer."

Freddie Mac's analysts summed up last week's Mortgage Rate activity saying, "The average 30-year fixed-rate mortgage hit the lowest level in its nearly 50-year history. Given these strong indicators in rates and sales, as well as recent increases in new construction, it's clear the housing market continues to be a positive force for the broader economy."

Our Lenders and I are working around the clock to make sure you can still buy your dream home and lock in the best possible rate. Call me today, and we can do a virtual tour, FaceTime tour, or meet in person! 843-410-7871

Elissa Campbell 

elissa.campbell@agentownedrealty.com

Cell: 603-540-7242