Good morning everyone – I hope you had a great weekend!
The Mortgage Bankers Association (MBA) released data showing a strong purchase market but hints at a potential slow down. Home purchase applications for September were up over 38% from a year prior. However, the data shows a 5% decrease from August 2020. Executives at the MBA are attributing this dip to quickly diminishing inventory and a slowing market improvement due to a second COVID wave.
For multiple reasons, we are expecting interest rate volatility in the near future. Our biggest concern is the presidential election and any unrest after the winner is announced. The second is going into Winter with growing COVID cases. The market responds strongly to COVID releases including case counts, potential vaccines, etc. Any positive news relating to COVID has potential to push mortgage interest rates higher. The third is the next stimulus bill in the works. In the beginning of October, we saw mortgage rates rise as the markets optimism about a bill grew. While a bill has not been finalized, we will likely see mortgage rates rise as one is put into place.
Rates held stable over the weekend. We maintain a locking bias unless you are able to closely watch the market.