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?
Freddie Mac PMMS is mixed
It’s Thursday morning after 10:00 AM and that means that everyone’s favorite mortgage rates report has been released: the Freddie Mac Private Mortgage Market Survey. Financial market participants dove back into risky assets this week, driving government bond yields up. Mortgage rates usually follow the path of long-term government bond yields, such as the 10-year yield, so it wasn’t surprising that rates mostly moved higher this week in the PMMS.
The average rate on a 30-year fixed rate mortgage rose one basis point to 3.42% (0.5 points); the average rate on a 15-year fixed rate mortgage actually moved down two basis points to 2.72% (0.5 points); and the average rate on a 5-year ARM moved up eight basis points to 2.76% (0.4 points).
Here is what Chief Economist at Freddie Mac Sean Becketti had to say about the week that was for mortgage rates:
“We describe the last few weeks as A Tale of Two Rates. Immediately following the Brexit vote, U.S. Treasury yields plummeted to all-time lows. This week, markets stabilized and the 10-year Treasury yield rebounded sharply. In contrast, the 30-year mortgage rate declined after the Brexit vote, but only by half as much as the 10-year Treasury yield. This week, the 30-year fixed rate barely budged, rising just one basis point to 3.42 percent. This pattern suggests that mortgage rates are likely to remain low throughout the summer.”
Click here to get today’s latest mortgage rates.
Fed Fund futures
The Fed Fund futures, which reflects the market’s belief in the likelihood of a rate hike, has been improving the chances of everyone meeting as time ticks forward. Even July, which for the past few weeks has had a 0% chance, now has a 1.2% chance. I’m on the edge of my seat. September and November have been sharing the same odds for a while now, and the trend continues as they both currently have an 18.8% chance. December has long been viewed as the most likely candidate for a rate hike, and it’s chances have finally crept up over a 1/3 shot to 36.6%. Will it happen? I’m still very skeptical, but there have been some Fed officials who are no doubt keen on hiking. We’re still too far away to say with any certainty, but the odds are steadily improving in favor of a December hike.
What does this mean for me?
Mortgage rates moved up this week, but not as much as some might have expected. And all things considered, they are still at very low levels. The 30-year fixed is only 11 basis points above the all-time low. That means that it’s absolutely worth the modest amount of effort it takes to pick up your phone and call to find out if you could save money on your monthly payments with a refinance. If you’re on the prowl for a new house, then it’s still a great time to lock in a low rate.
Click here to get today’s latest mortgage rates.
Today’s economic data:
Weekly Jobless Claims
Weekly jobless claims are unchanged from the prior reading this morning at 254,000. That’s 11,000 below economists’ predictions for 269,000. The four-week moving average is down 6,000 to 259,000.
Producer Price Index – Final Demand
The producer price index for June rose 0.5%. Year over year it’s up 0.3%. PPI less food and energy is up 0.4%.
Fedspeak
There will be a decent amount of Fedspeak today:
- St. Louis Fed President James Bullard will speak at 10:00 AM and 6:40 PM.
- Atlanta Fed President Dennis Lockhart will speak at 11:30 AM.
- Kansas City Fed President Esther George will speak at 1:15 PM.
- Dallas Fed President Robert Kaplan will speak at 7:00 PM.
Miscellanea:
- Donald Trump will announce his running mate tomorrow. He’s pulled even with Hillary Clinton in recent polls and there’s no telling how the market might react to whichever candidate he selects.
Notable events this week:
Monday:
- Labor Market Conditions Index
- Treasury auctions
- Fedspeak
Tuesday:
- Job Openings and Labor Turnover Survey
- Treasury auctions
- Fedspeak
Wednesday:
- EIA Petroleum Status Report
- Treasury auctions
- Beige Book
- Fedspeak
Thursday:
- Weekly Jobless Claims
- Producer Price Index – Final Demand
- Fedspeak
Friday:
- Consumer Price Index
- Retail Sales
- Empire State Manufacturing Survey
- Industrial Production
- Fedspeak
from Total Mortgage Underwritings Blog http://ift.tt/29LKa8F
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