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?
Brexit turmoil softens, but still continues
When the U.K. voted to leave the European Union last week, and global markets began to go into free-fall mode, one question on people’s minds was: how long will this last? Well, after a couple days of worrisome stock declines, there are finally some signs that investors have begun to settle down.
In the U.S., stock futures have gained back a modest amount of their massive losses, as investors start to dip their toes into risky waters once again. No one knows how the Brexit will affect the European trading bloc as we’re sort of swimming in the dark here, so the only hope investors have is to hope they get lucky with their estimated guesses. At the time of this writing, the DOW, NASDAQ, and S&P 500 are all trading in the positive.
Across the pond, the British pound, which had gotten battered down to a 31-year low yesterday, was up 0.8% against the dollar and 0.12% against the Euro. Does this mean that a Brecovery is in the works? Unlikely. Today’s gains seem to be due to investors profiting from bets that the pound would decline.
With David Cameron saying yesterday that it will be the job of the next Prime Minister to orchestrate the details of Britain leaving the European Union, the markets are forced to wait even longer to understand the full repercussions the deal. With no clear leading candidate for Cameron’s successor, analysts are dealing with a variety of politicians and their implications for Brexit negotiations.
As one market analyst put it, we are in “a period of exceptional uncertainty.” Only time will tell what comes of all of this.
Federal Reserve Chair Janet Yellen was scheduled to participate in a debate on Wednesday with Bank of England Governor Mark Carney, but that event has now been canceled. Apparently, the European Central Bank President Mario Draghi, who was also set to appear in the debate, has more important things to attend to in Brussels.
Click here to get today’s latest mortgage rates.
10-year yield is still way-way down
The yield on the U.S. 10-year Treasury note is currently trading at a staggering 1.47%. That’s less than 10 basis points above the all-time low of 1.39%. Yesterday, it dropped as low as 1.43%. It’s hard to truly comprehend just how strange that is. Mortgage rates have a tendency to follow in the footsteps of the 10-year yield, so the low yield likely means low rates.
Fed Fund futures paint a fuzzy picture
For the majority of the year, it seemed as though there would at least be one rate hike in 2016. After the Brexit, any prior plans went out the window. We’re left with Fed Fund futures that don’t show any remote chance of a rate hike until December, but even then it’s only a 17.3% chance.
That’s not good. What’s worse is that there’s a 7.6% chance that rates will be lowered by 25 basis points. No doubt, the Fed Fund futures can be volatile, and there’s no telling what levels they will adjust to, but a rate hike seems miles and miles away at the moment.
What does this mean for me?
Mortgage rates are incredibly low, and it’s a great time to get a mortgage or refinance. There’s really not much else to say. How long will they stay like this? That’s anyone’s guess. My advice: lock in a low rate while you can.
Click here to get today’s latest mortgage rates.
Today’s economic data:
First-quarter GDP at 1.1%
The third and final first-quarter estimate from the Commerce Department is showing that GDP rose by 1.1%. That’s a hair above the consensus for 1.0%. That’s not bad considering that personal consumption was the worst in two years.
S&P/Case-Shiller Home Price Index
The 20-City index jumped up 5.4% from the previous April. Home prices in some cities are even moving higher than levels reached pre-Great Recession. Hopefully, these prices aren’t artificially inflated.
Consumer Confidence spikes
Consumer confidence came in at a 98.0 for June. That’s a decent amount higher than the consensus of 93.3, and is the best reading of the year.
Miscellanea:
As if the British weren’t dealing with enough as is, their national soccer team suffered a humiliating defeat to Iceland yesterday, resulting in a swift Brexit from the 2016 Euro Cup. I guess when it rains it pours…
Notable events this week:
Monday:
- International Trade in Goods
- Dallas Fed Manufacturing Survey
Tuesday:
- GDP
- S&P/Case-Shiller Home Price Index
- Consumer Confidence
Wednesday:
- Personal Income and Outlays
- Janet Yellen speaks
- Pending Home Sales Index
- EIA Petroleum Status Report
Thursday:
- Weekly Initial Jobless Claims
- Chicago PMI
Friday:
- PMI Manufacturing Index
- ISM Manufacturing Index
- Construction Spending
from Total Mortgage Underwritings Blog http://ift.tt/295K5Or
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