Loan Rates Snap Higher

Mortgage rates snapped back toward recent highs today. Part of this has to do with how well rates have done over the past 3 weeks. Granted, rates haven't moved significantly lower over that time, but they've at least avoided moving significantly higher--something that couldn't be said for every other week in 2018.

There are several big and intractable reasons for the general rise in rates, and none of them have changed. As such, investors in the bond market (which underlies rate movement) are understandably hesitant to make trades that push rates very much lower. They were already on the edge of their comfort zone when yesterday's tariff announcement forced rates even lower. We see that with that line having been crossed, buyers disappeared (bond buying pushes rates lower) and seller took over on Friday.

The net effect wasn't too terribly traumatic, but it mortgage lenders are nonetheless back in the same rate ballpark seen on Wednesday afternoon. For most, that means conventional 30yr fixed quotes of 4.5-4.625% for well-qualified borrowers.

Loan Originator Perspective

Bond markets regressed today, failing to hold recent gains yet again. Trade wars make goods more costly, and inflation's already been a market concern. Locking early remains the prudent path, rates are still trending upward. Ted Rood, Senior Originator

Today's Most Prevalent Rates

• 30YR FIXED - 4.5-4.625%
• FHA/VA - 4.375%
• 15 YEAR FIXED - 3.875%
• 5 YEAR ARMS -  3.5-3.75% depending on the lender

Feeling Moderate Gains to Keep Hope Alive For a Rate Ceiling

It came in at 2.90% or something close to it continues to look like the center of a range of yields that might like to... think about... maybe... potentially... trying... to act as a ceiling for rates.  After bouncing at 2.92% yesterday, yields continued lower today.  That made today the 12th day of a range since rates first hit 2.90% without moving that much higher.  We believe that you're into hope and optimism, so this looks like the beginning of a potential bounce.  If you're playing it safe or simply not too hopeful, it's just a more convincing consolidation before rates continue a longer-term move higher.

Today's economic data was a non-event.  Granted, two of the reports were in line with the bond market improvements, but notably, bonds actually weakened somewhat after each of those reports (Chicago PMI and Pending Home Sales).  That wasn't a reaction to the data as much as it was simply evidence that the data didn't matter.

Traders were instead focused on the month-end trading environment, where some accounts are required to hold a certain mix of trading positions for reporting purposes or simply for month-end balance sheet reasons.  That makes the next 2 days critical in determining whether or not this potential ceiling in rates gets a few more ceiling tiles installed, or whether it's boarded up to become a floor under the next move higher.

Shop at Your Local Small Business

There is a consensus that the National Federation of Independent Business is America’s leading small business advocate. They have been representing over 30,000 small, independent business owners. So with that being said they will cosponsor the 2016 Small Business Saturday promotion with the American Express Credit Card Company. 

Our research has shown that according to the U.S. Small Business Administration, small businesses account for most of the jobs in this wonderful country. They have provided 66 percent of all net new jobs since the 1970s. They represent approximately 99.7 percent of all U.S. employers.

Most Americans don’t know an owner of a big department store, but there’s a good chance that many people know small-business owners. They’re our friends and neighbors. They’re among the most generous supporters of civic groups, local charities, youth sports, schools, and virtually every other form of community activity.

Support Small Business Saturday

November 26th, the Saturday after Thanksgiving, is Small Business Saturday. It’s intended to encourage Americans to support as many small business owner as possible. It should not just be one day a year, but whenever you go shopping.

Black Friday, the traditional start of the holiday shopping season, is when families wake early, sit in traffic, compete with other drivers for mall parking spots, jostle with crowds, and stand in line to buy things they could find much closer to home.

Small Business Saturday offers a much different experience. Shoppers who visit locally-owned businesses will find almost everything they could get at the mall and plenty of items by local artisans, designers, bakers, chocolatiers, brewers, and tinkerers that can be found only on Main Street. In terms of service, Americans who “shop small” likely will be dealing directly with owners who know that happy customers usually come back.

The campaign to “shop small” on the Saturday after Thanksgiving started in 2010. It has grown every year. Last year, more than 95 million Americans visited local businesses on Small Business Saturday, and they spent more than $16 billion.

Help The Economy Get Back On Its Feet

We certainly do hope that even more Americans participate this year. Small Business Saturday is a great way to start the holidays while supporting local communities. You will also boost the national economy which helps all Americans.