If you have been following these blog posts you have seen me urge caution and patience when working within the rate environment. I have spoken about getting information you can verify and share. I have urged you use caution and judgement when talking about rates, and I have wanted you to know the facts and share them with your clients and referral partners.
I wanted to put some things into perspective for you and get an idea why you need to be aware of what is going on. For the sake of this demonstration, I am using the closing numbers from the UMBS 3% 30yr as my example for pricing purposes. Remember, price goes up, rates go down. Prices go down, rates go up! Take a look at the following:
- November 8th 2018 – 93.90
- April 8th 2019 – 98.42
- May 20th 2019 – 99.06
- May 31st 2019 – 100.40
- July 29th 2019 – 100.73
- August 5th 2019 – 101.73
- September 4th 2019 – 102.25
- September 13th 2019 – 100.54
- September 24th 2019 – 101.45
- October 2nd 2019 – 101.70
While it being quite the wild ride, today we are near the same levels we were at on August 5th when everyone was euphoric about rates! Yes, we are still a little bit away from the September 4th high water mark of 102.25, but we are almost 800 bps better than the low of last November! 800 basis points!!!
As I have said before, I believe the trend is lower and that we can reach or go past all-time lows in the not too distant future. I also think this volatility is going to continue along with this trend. Barring a real trade deal with China, or some other major event, you have to follow the information and the sources of that information. I follow MBS Highway pretty closely and a few other independent channels, but you have to find your place you are comfortable trusting, and then position yourself as a resource.
It’s always a good idea to lock your client if they are nervous or a jump in rate could blow out their deal. It’s always good to lock near emotional numbers like rates near either a whole number or half number. 3.99% and 3.49% are much different to your consumer than 4% or 3.5%. It just is the way that goes!
Be sure to have the rate and volatility talk with your customers. Show your clients the difference in payments and pricing. Listen to them when they are talking about payments and rates! Share with them a rate/point relationship!
Experts have verified information, share and educate their clients, and provide the options so that the client is making an informed choice about financing their property!
Be sure to go to the website and register for Crossroads 2019! www.IMTcoaching.com
As always, questions or comments: Mike@IMTcoaching.com