Happy Friday, and welcome to the TMS current mortgage rates blog. There’s some economic news out today, but first, your mortgage rate forecast/advice.
Click here to get today’s latest mortgage rates.
Where are mortgage rates going?
The big news this week was the minutes from the April FOMC meeting. Talk about potentially hiking in June, if the data supports it, caused the alarm bells to sound for many financial market participants who know saw June firmly placed back no the table. Prior to the release of the minutes, the Fed Fund futures had the chances of a June rate hike at 19%. Afterwards, we were looking at around a 34% chance.
Things have tempered a bit since then and right now the implied probability of a June rate hike is 30%. Anytime the Fed makes a clear signal about adjusting rates at an upcoming meeting the markets get the jitters. Sometimes the reaction sticks, but more often than not the market rebounds after a few days. We’ll see what happens over the rest of the day, but right now it seems like the markets are headed to gain back their early week losses.
The yield on the U.S. 10-year Treasury note spiked on Wednesday due to the FOMC minutes and it hasn’t really moved too much since. It’s currently at 1.86%. Mortgage rates have a tendency to follow the lead of the 10-year yield.
Freddie Mac PMMS doesn’t tell the whole story
The Freddie Mac Primary Mortgage Market Survey came out Thursday morning at 10 AM (as it does every week), and it revealed that mortgage rates nudged up a few points. The average rate on a 30-year fixed rate mortgage is 3.58% (0.6 points), the average rate on a 15-year fixed is 2.81% (0.5 points), and the average rate on a 5-year ARM is 2.80% (0.5 points).
The catch with the Freddie Mac PMMS is that the data is collected early on in the week, so when a big market moving event happens on Wednesday like it did this week, it doesn’t get factored into the report until next week. It basically means that rates are about 5-10 basis points higher than what the PMMS says.
Don’t wait for rates to rise. Start your mortgage process now.
What does this mean for me?
Mortgage rates did move up this week but looking at the big picture we can see that they are still historically low levels. That means that it’s still a great time to be a borrower. I do think that there’s more of a chance for rates to rise than fall, so my recommendation is to refinance or purchase a home sooner rather than later.
Click here to get today’s latest mortgage rates.
Today’s economic data:
Existing Home Sales are up
Existing home sales increased by 1.7% in April and are now at 5.450 M. Year over year, home sales are up 6.0%.
Don’t wait for rates to rise. Start your mortgage process now.
Notable events this week:
Monday:
- Empire State Manufacturing Survey
Tuesday:
- Consumer Price Index
- Housing Starts
- Industrial Production
Wednesday:
- EIA Petroleum Status Report
- FOMC Minutes
Thursday:
- Weekly Jobless Claims
- Philly Fed Business Outlook Survey
Friday:
- Existing Home Sales
from Total Mortgage Underwritings Blog http://ift.tt/1TL8x2F
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