Coronavirus Uncertainty Fueling Low Rates

March 9, 2020

Last Week in Review: How Low Can Rates Go?

Home loan rates touched all-time lows this past week, fueling refinance activity and creating a sense of urgency for homebuyers to lock in purchase loans.

The question many people are asking is, "how low can rates go?"

The short answer -- no one knows. A lot will be determined by the economic impact of the coronavirus and that is impossible to handicap at the moment.

What we do know:

  • The coronavirus outbreak is improving in China and the outbreak numbers here in the U.S. have not exploded, as of yet. This is good news, and should it continue, it is unlikely we will see much lower home loan rates in the near future.
  • Home loan rates have not improved in lockstep with the 10-year Note yield, which has also declined, though much more sharply, to a historic low of .66%. The reason -- mortgage backed securities (MBS), where home loans are priced, carry a different risk profile than that of Treasuries. Investors in MBS are subject to refinance risk when rates go lower. To offset that risk, investors demand a premium within MBS which creates a higher price to both the lender and ultimately the homeowner.
  • Mortgage lenders are so busy they can hardly keep up with the business. What is one thing you don't do when business is so busy? Lower price.

Bottom line: today represents a golden opportunity to lock in the best rates in the history of the U.S. and should be taken by those who can benefit.

Government Agency Approvals

FHA Non-Supervised Mortgagee Approval #:
24751-0000-5
VA Automatic Lender Approval #:
902324-00-00

Mortgagee/Loss Payee Clause

Carrington Mortgage Services LLC
ISAOA/ATIMA
P.O. Box 692408
San Antonio, TX 78269-2408

Industry Links

Loan Limits LookupMortgage Letters
This information is provided for your convenience and Carrington Mortgage Services, LLC makes no warranties concerning the accuracy or completeness of any of the information. This is not financial or legal advice and should not be taken as such. This information is for mortgage professionals only and is not intended for distribution to consumers.
CAREERSINVESTORSabout uswholesale

An Equal Housing Opportunity Lender. Copyright 2007 - 2022 . Carrington Mortgage Services, LLC headquartered at 1600 South Douglass Road, Suites 110 & 200-A, Anaheim, CA 92806. NMLS ID # 2600. Toll Free # 800-561-4567. All rights reserved. Restrictions may apply. All loans are subject to credit, underwriting and property approval guidelines. Nationwide Mortgage Licensing System (NMLS) Consumer Access Web Site: www.nmlsconsumeraccess.com.

The content of this website is intended for licensed third-party originators or brokers only and may not be duplicated or disseminated to the public. Carrington Mortgage Services is one of the leading wholesale mortgage lenders.

Government Agency Approval | FHA Non-Supervised Mortgage Approval #: 24751-0000-5 | VA Automatic Lender Approval #: 902324-00-00

linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram