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 this morning and it’s showing that mortgage rates have dropped to new 2016 lows:
- The average rate on a 30-year fixed rate mortgage fell 6 basis points and is now at 3.54% (0.5 points).
- The average rate on a 15-year fixed rate mortgage went down 6 basis points to 2.81% (0.5 points).
- The average rate on a 5-year ARM dropped 8 basis points and is now at 2.74% (0.5 points).
The previous 2016 low for the 30-year fixed rate was 3.57%, back in the week of May 12. Here’s what chief economist for Freddie Mac, Sean Becketti, had to say about the drop in mortgage rates:
The 10-year Treasury yield continued its free fall this week as global risks and expectations for the Fed’s June meeting drove investors to the safety of government bonds. The 30-year mortgage rate responded by falling 6 basis points for the second straight week to 3.54 percent–yet another low for 2016. Wednesday’s Fed decision to once again stand pat on rates, as well as growing anticipation of the U.K.’s upcoming European Union referendum will make it difficult for Treasury yields and–more importantly–mortgage rates to substantially rise in the upcoming weeks.
As stated, the Federal Open Market Committee made a unanimous decision to keep their benchmark interest rate where it is at 0.25%-0.5%. From what it seems, they aren’t keen to raise rates anytime soon. The “dot plot” shows that the number of Fed officials who now foresee only one rate hike in 2016 has gone up from one to six. Most of the changes to the Fed’s statement had to do with the slowing labor market. You can easily view the changes with the Wall Street Journal’s Fed statement tracker.
Was any of this surprising? No. Everyone knew what was coming this time. Some Fed watchers might have expected the FOMC to be a touch more hawkish, but no one thought they would raise rates.
10-year yield moves lower
The 10-year yield immediately dropped after the statement was released, and has since gone down further to its current position at 1.55%. It hasn’t been that low since 2012.
Fed Fund futures
The Fed Fund futures is now showing the implied probability of a rate hike in July, September, November, and December at 7%, 24%, 25%, and 43%, respectively.
What does this mean for me?
New 2016 lows mean it’s a great time to purchase a home or refinance your current mortgage.
Click here to get today’s latest mortgage rates.
Today’s economic data:
CPI disappoints
The Consumer Price Index for May showed a monthly change of 0.2%. CPI less food and energy also came in at 0.2%. Year-over-year, CPI is only at 1.0%. After import and export prices and producer prices showed some signs of life this week, there were expectations that CPI would do the same. Unfortunately, it was not to be.
Weekly Jobless Claims are trending lower
Applications for U.S. unemployment benefits did rise this week by 13,000 to 277,000, but the 4-week moving average is slightly down.
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/1Ubdsun
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