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?
Rates holding steady
Ever since mortgage rates rose after the April FOMC minutes were released last Wednesday, they’ve basically held steady. The 30-year year fixed rate, which hit a 3-year low two weeks back at 3.57%, is now up about 6 basis points. With little market-moving data out until GDP on Friday, we’re left to rely on Fedspeak as the sole influence on rate hike likelihood, and the Fed officials don’t seem too keen on taking their feet off the gas.
Philly Fed President Patrick Harker stated yesterday that he could “easily see the possibility of two or three rate hikes over the remainder of the year.” He’s with the Fed camp that fears raising rates too late will bring on a heavy pickup in inflationary pressures. Instead of waiting and acting aggressively, he wants to make gradual adjustments that allow for “inflation to move up in a sustainable way.” Harker isn’t a voting member this year, but either way, he’s flying with the hawks, and putting more heat on the June meeting.
St. Louis Fed President and voting member of the FOMC, James Bullard, made similar remarks yesterday about the risk of inflation if rates are kept too low for too long. Right now, the consensus coming out from the Fed is that the strong labor market warrants a rate hike in order to avoid the risk of too much inflation.
We’ve heard from many Fed officials over the past week, and while their opinions are certainly meaningful, there’s no denying that the Queen Bee Janet Yellen is running the show. Fortunately, we won’t have to wait too long to catch a glimpse of the Fed Chair’s mind. Yellen receives an award at Harvard University on Friday and will give a speech afterwards. Expectations are that she will reinforce the hawkish comments of her fellow officials, but the extent to which she does will be interesting to see.
Not everyone thinks that a June rate hike is warranted at the moment. The estimable Fed watcher Tim Duy wrote a piece yesterday stating why he believes there is more risk in acting too soon than too late. It’s worth reading the whole article, but his main points are that: a) there is data that would lead one to believe the labor market is not as strong as the Fed says it is b) Fed officials don’t think that “tapering and ending QE was not tightening” and c) the Fed officials are “too enamored with the end game” of normalizing rates.
Fed Fund futures
Looking at the Fed Fund futures, which express the market’s belief in the likelihood of rate adjustments, the implied probability for June is 34%. After that, we have July, September, November, and December at 61%, 68%, 70%, and 80%, respectively.
10-year yield slightly up
The yield on the 10-year Treasury note is currently trading at 1.87%, up slightly from where it’s been the past week. Mortgage rates tend to follow the lead of the 10-year yield.
Don’t wait for rates to rise. Start your mortgage process now.
What does this mean for me?
Mortgage rates have risen, but, all things considered, they are still at historically low levels. Is it possible that rates will move lower? Sure. I just see it more likely that rates move higher. Which is why if you’re looking to purchase a home or refinance your current mortgage, I would say the wise decision is to act sooner rather than later.
Click here to get today’s latest mortgage rates.
Today’s economic data:
New Home Sales Soar in April
New home sales came in at 619,000 in April, well above the consensus for 523,000. That’s the highest reading since January 2008 and is the biggest monthly gain since January 1992.
Richmond Fed Manufacturing Index Falls
The Richmond Fed index dropped 15 points and now sits at -1. Data out from the manufacturing sector this month has been pointing toward a slowdown.
Treasury auctions
There are several Treasury auctions today:
- 4-week Bill Auction at 11:30 AM
- 52-week Bill Auction at 11:30 AM
- 2-year Note Auction at 1:00 PM
Notable events this week:
Monday:
- PMI Manufacturing Index Flash
- Treasury auctions
- Fedspeak
Tuesday:
- New Home Sales
- Richmond Fed Manufacturing Index
- Treasury auctions
Wednesday:
- International Trade in Goods
- EIA Petroleum Status report
- Treasury auctions
Thursday:
- Durable Goods Orders
- Weekly Jobless Claims
- Treasury auctions
- Fedspeak
Friday:
- GDP
- Consumer Sentiment
- Janet Yellen speaks
from Total Mortgage Underwritings Blog http://ift.tt/1XRaosr
No comments:
Post a Comment