Housing News, Videos

Different Month, Same Market

Alexis: Hey, everybody! Welcome back to the Mortgage Rundown. My name is Alexis Quinney and I'm here with Jason Obradovich, CIO of New American Funding. How have you been doing, Jason?

Jason: I'm great, Alexis. How are you?

Alexis: Good. So, since we last spoke, we had an election. So, I really wanted to hear from you about what that means for mortgage rates.

Jason: Yeah, you know, the election obviously is going to weigh heavily on the market. Unfortunately, at this point, nothing really has been conceded or confirmed. It's a longer confirmation process than I think people realize because typically a candidate concedes that that isn't the case right now.

But the market is under the presumption that Biden is the winner, that he will be obviously building his cabinet, building his economic plan, and the things that he wants to do with his presidency. There is some uncertainty, obviously, around the Senate as well. And whether or not the Democrats will have control of the Executive branch, the House of Representatives, but also the Senate. And so really, if they're able to get control of the Senate, then they actually probably can do a lot and that will have some big implications for the market. As of right now, it seems like they're probably not going to get control of the Senate. So, I think the market's really confused in terms of what is this presidency going to look like at least until the midterms.

Alexis: All right. Yeah, that makes sense. So, another thing that I wanted to ask you about was what is going on with COVID-19. I know it's kind of spiking again, so I also wanted to touch there. What can we expect to see in the next few months?

Jason: Yeah, you know, COVID-19 is obviously the front page of every newspaper and something we're all keeping a close eye on. Right? Especially as we move toward the holidays and winter where people are indoors more, it's likely it's going to get transmitted more. What was very fortunate about the summertime is that it was the heat really impacted COVID’s ability to transmit. And so they think that during the cold months, it actually is going to transmit from person to person a lot easier. And so with that and with the new presidency, I think there's a lot of eyes on how are they going to handle this crisis. Are they going to be locking people indoors or are they going to slow down the economy or what kind of limitations to economic activity, not necessarily personal activity, but what kind of restrictions will that be on economic activity and how is that going to impact the market? You know, I think there's a lot of concerns that you know, there's going to be a lot more heavy-handed government in terms of economic activity and people will be able to do what they want without a lot of restrictions. That might be good for mortgage rates, but that may not be good necessarily for the economy.

Alexis: Right. OK, well, I guess it sounds like we're still in sort of this waiting game until more announcements are made.

Jason: Yeah, you know, just one point on mortgage rates. You know what we saw through almost all of 2020 every month, mortgage rates just kept dropping and dropping and dropping. And since the election, now that there's some certainty, we actually saw Treasury rates go up, but mortgage rates haven't moved. And so mortgage rates have been very flat for the last three, probably about three months. What they're going to do going into next year, I think is going to be pretty quiet. The Federal Reserve met a couple of weeks ago, pretty much mum the word in terms of their policies and their stance is nothing's really going to change. But going to 2021, once there is the inauguration, once that new cabinet takes shape and really what their economic plans are, then we might start seeing some movement in mortgage rates as investors try to kind of get in front of what the administration plans on doing.

Alexis: Yeah, that makes sense. OK, well, I think within the next few weeks I'll have more questions for you. But as for now, I think that was a great update. Thank you so much for your time and I will talk to you soon.

Jason: Absolutely. And if I don't see you beforehand, have a great happy Thanksgiving. Everyone out there have a happy Thanksgiving if we don't see it beforehand and please take care.

Alexis: Bye!