Happy Friday, and welcome to the TMS current mortgage rates blog. There’s some economic data out today, but first, your daily mortgage rate forecast/advice.
Click here to get today’s latest mortgage rates.
Where are mortgage rates going?
Mortgage rates down to new 2016 lows
The Freddie Mac Private Mortgage Market Survey (PMMS) came out yesterday and it revealed that mortgage rates dropped to new 2016 and 3-year lows. The average rate on a 30-year fixed rate mortgage fell 6 basis points to 3.54% (0.5 points). The average rate on a 15-year fixed rate mortgage dropped 6 basis points to 2.81% (0.5 points). The average rate on a 5-year ARM slipped 8 basis points to 2.74% (0.5 points). Most of the data was collected before the Fed came out with their decision to keep their benchmark interest rate where it is at 0.25%-0.5%.
10-year yield moves lower
The yield on the U.S. 10-year Treasury note is currently trading at 1.62%. That’s up from Thursday’s bottom of 1.52% (a 52-week low), but still very low for 2016. For perspective, the 52-week high is 2.49%. The yield started the week at 1.64%. Mortgage rates typically go wherever the 10-year yield goes, so if this trend continues, that could mean lower rates next week.
Fed Fund futures
The FOMC came out and made it clear that the most likely course of action will be for one rate hike in 2016. As they have been for quite some time, the markets are skeptical. The implied probability of a rate hike in July, September, November, and December is 10%, 26%, 27%, and 48%. There’s no reason to believe these numbers are set in stone. If there’s anything we learned from this past month, it’s that futures are finicky. It will be interesting to see where the Fedspeak will take them this time.
What does this mean for me?
It’s a good week for homebuyers. Mortgage rates dropped to 2016 lows. There is definitely the opportunity to refinance or lock in a low rate for years to come. Do you need to drop everything you’re doing and call your lender right this second? Probably not. From what it seems, mortgage rates will be around these levels for the near-term. But I wouldn’t discount the Fed’s ability to jawbone the markets into believing a rate hike is coming, which has the potential to drive rates up. In the end, I think the wise decision is to lock in a low rate now while it’s a sure thing.
Click here to get today’s latest mortgage rates.
Today’s economic data:
May Housing Starts down 0.3%
- Housing starts came in at 1.164 million this morning. That’s above the expectations for 1.15 million, but 0.3% below the previous reading of 1.172 million. Building permits rose, reflecting the potential for continued growth in the housing sector. Housing permits are at 1.138 million. That’s a rise of 0.7% from the previous reading. There are certainly some negatives but as a whole, the report is a positive sign for the U.S. economy.
Notable events this week:
Monday:
- Nothing
Tuesday:
- FOMC Meeting Begins
- Retail Sales
- Import and Export Prices
- Business Inventories
Wednesday:
- PPI-FD
- Empire State Manufacturing
- Industrial Production
- EIA Petroleum Report
- FOMC Meeting Ends
Thursday:
- CPI
- Weekly Jobless Claims
Friday:
- Housing Starts
from Total Mortgage Underwritings Blog http://ift.tt/1XtDpv4
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