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Mortgage Rate Update 12/14/20

Hello everybody, this is Sean Zalmanoff here with this week’s mortgage rate update. Today is December 14th. Yes, it is definitely December 14th and pretty solid news in the bond front, rates are stable this week. We are once again, close to the all-time lows in mortgage rates, which is good for you. It’s good for your home financing needs. It’s good for your mortgage needs. It’s good for your refinance needs. It’s good for anything that you actually need when it comes to long-term financing.

Last week we did have a 30 year bond auction on Thursday, and it was Treasury’s not mortgage backed securities, but the bond auction was well-received by the markets. There’s something called a bid-to-cover ratio. That bid-to-cover ratio is very strong as far as the dollars that we’re bidding on the amount of bonds that were out there.

It’s a sign that people who are buying these bonds do have an appetite for the rates that are out there right now, even though they’re low. That’s a really good sign for us. Something else to consider that’s just going on right now, the markets, almost every index of stocks that you look at is trading at close to or above the highest price earnings ratio that they’ve ever traded at before. Part of that is because of the stimulus that has been punted into the economy and the projection of the stimulus.

Part of that is because rates are so low right now that there really isn’t anything else for some people to do with money besides invest it into stocks. This is causing our PE ratios, the price to earnings ratio, the stock to trade close to all time highs. Now, what that means for the bond market is should there be any kind of sell off that happens that means that that money could likely flow into bonds.

It would either flow into bonds or sit on the sidelines as cash. That would be good for rates and it flows into bonds. Price of the bond would go up, the yield would go down and so would your mortgage rate. It’s kind of a light week in news that there aren’t a lot of headlines. There’s a lot of reports, but not a lot of market moving reports.

What could be market moving is the stalemate that we still have in Congress in regards to stimulus and how much it’s going to be and when it’s going to come. That could impact our rates at some point, if our two fair political parties couldn’t come together and make a decision on that for us. Hey guys, it’s the holiday season and the Sean Z team, most of us here at USA mortgage, we’ve been really blessed. It’s been just an amazing and awesome year.

For those of you doing a mortgage with us, now, we thank you or any of our amazing past clients that this is the fourth, fifth or 10th loan that we’ve had the pleasure to deal with. Thank you as well.

For anybody out there that you’re just struggling right now, or it’s tough to put meal on the table. Hey, we would love to help you if there’s a holiday dinner or something that you’re not going to be able to meet for your family, based upon whatever predicament that this crazy 2020 has dealt you, please reach out to us, let us know, and we will do anything that we can to help you.

I’m Sean Zalmanoff with the Sean Z team here. I just appreciate you all, if you need anything, holler and have an amazing and awesome week.

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