Having started to inch up last week, the average rate for a 30-year mortgage has since jumped another 17 basis to 3.73 percent but remains 92 basis points below its mark at the same time last year and within 32 basis points of a three/six-year low.
At the same time, while the average rate for a 15-year fixed mortgage has ticked up another 12 basis points to 3.21 percent, it remains 90 basis points below its mark at the same time last year, and while the average rate for a 5-year adjustable has ticked up another 13 basis points to an inverted 3.49 percent, it remains 43 basis point below its mark at the same time last year.
And while yesterday’s rate cut was effectively priced in, with the rate for the 10-year treasury actually inching up a few basis points following the Fed’s announcement and then dropping back this morning, there’s more uncertainty with respect to the Fed’s path forward, with the probability of a third rate cut by the end of the year currently running around 63 percent, according to an analysis of the futures market.
Keep in mind that the pace of home sales in San Francisco, as measured prior to the jump in rates over the past two weeks, has been down.
In case you are wondering what the rate cut will do to rates, the most recent Treasury auction results are from yesterday, the day after the Fed dropped rates.
Term——3 Year….5 Year….30 Year
9/03/19…1.38%…1.35%….1.95% First trading day of September
9/17/19…1.68%…1.66%….2.27% Day Before Rate Cut
9/19/19…1.68%…1.66%….2.22% Day After Rate Cut
So you can see that everything is up from the start of the month, even after rates were cut, and the actual cut had almost no effect.
Or as we wrote above, “while yesterday’s rate cut was effectively priced in, with the rate for the 10-year treasury actually inching up a few basis points following the Fed’s announcement and then dropping back this morning”…
And the 10 year has fallen back to its level of 2 weeks ago.