Early this week mortgage rates hit 2016 lows, but have since increased a bit. Yesterday’s Primary Mortgage Market Survey from Freddie Mac showed the average rate on a 30-year fixed-rate mortgage to be 3.58% with 0.5 points, down a single basis point from last week. However most of the survey results are collected early in the week, and bonds have sold off over the course of the week, and mortgage rates have risen as a result. On Monday, yields on 10-year Treasuries were around 1.70%. Now yields are pushing toward 1.80%. Mortgage rates are still low, but they are a little above the lows of the year.
Click here to get today’s latest mortgage rates.
Today’s economic data:
With no further adieu (because who needs more adieu, anyway?):
- The Empire State Manufacturing Survey for April came in above expectations. The survey showed a reading of 9.56 compared with the expectation of 3.00. March’s number was 0.62, and this report was in negative figures from August to February (numbers above zero show expansion, numbers below zero indicate contraction). The moribund manufacturing sector appears to be turning around, with several of the regional Fed reports showing unanticipated strength in April. March (and the preceding months) were not so hot, and right on cue…
- March’s Industrial Production report was in negative numbers. This is the second straight Industrial Production report to show contraction. The reading came in at -0.6%, expectations were for a reading of -0.1%. February’s number was revised down to -0.6%. Manufacturing was down largely due to automobile production falling, mining continues to be hurt by falling coal production, and utilities were hurt by a lack of demand. But based on the regional reports for April, it looks like things might be turning around, and we could see some positives in this report next month.
- Consumer Sentiment in April was below the consensus. The print was 89.7, compared with expectations of 91.8. This report has been on the decline for several months. Perhaps consumers have begun to pay attention.
On the whole, this week’s economic data was generally pretty soft.
The week that was:
Much of this week’s economic data was weaker than anticipated. Retail Sales for March showed contraction. Neither the Consumer nor Producer Price Indices showed signs of inflation (I know, big shock there). Despite this, bonds sold off. Why, you ask? Great question. My best guess is that we’re seeing some profit-taking, given the rallies of the prior weeks. We’re also seeing a reaction to the stock rally that occurred over the past week, and I think that rally has a lot to do with oil rallying as a result of the idea that some major oil producers may freeze production. This is just a rumor at this point, and a freeze in production may not have much impact anyway. Anyway, I think that is the week in a nutshell, and I don’t think the rise in yields is particularly telling, nor do I think it is a particularly big deal.
I don’t think it is a big deal because fundamentally, very little has changed, and I think we’re just seeing typical volatility. It would be shocking if the Fed hikes in April (the implied probability of a hike according to the Fed Fund futures prices: 1%). It doesn’t seem like we’ll see a hike in June, either (the implied probability here: 12%). Recent Fedspeak has been dovish on the whole. The last set of Fed minutes were dovish. Inflation is still low, and the wage growth that would need to occur in order to sustain inflation is just not there. We still face the same global headwinds and uncertainty that we faced the last couple weeks.
So, I don’t think it is particularly probable that we will see a significant increase in mortgage rates anytime soon. The conditions just don’t seem to be there. Expect the normal volatility, though.
Don’t wait for rates to rise. Start your mortgage process now.
Is it a good time to get a mortgage?:
Let’s not belabor this. Yes, now is a very good time to get a mortgage. Rates are sitting just above the lowest levels of the year.
Have a great weekend.
Don’t wait for rates to rise. Start your mortgage process now.
Notable events this week:
Monday:
- Treasury auctions
- Fedspeak
Tuesday:
- Treasury auctions
- Fedspeak
Wednesday:
- Retail Sales
- Producer Price Index – Final Demand
- EIA Petroleum Status Report
- Treasury auctions
- Beige Book
Thursday:
- Consumer Price Index
- Weekly Jobless Claims
- Treasury auctions
- Fedspeak
Friday:
- Empire State Manufacturing Survey
- Industrial Production
- Consumer Sentiment
- Fedspeak
from Total Mortgage Underwritings Blog http://ift.tt/1NsGwe1
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