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?
Fed stands pat on rates
The Federal Reserve concluded its two-day meeting yesterday afternoon with a statement that they will be keeping the Federal Funds rate at its current level of 0.25%-0.5%. Kansas City Fed President Esther George was the only Fed official who voted to raise rates by a quarter of a percent.
The decision came as a surprise to no one, and with no post-meeting press conference with Fed Chair Janet Yellen, fedwatchers were left to parse the written statement for monetary policy clues. Turning to the Wall Street Journal’s Fed Statement Tracker, we can see that this month’s statement is much more positive than last month’s. The Fed noted that:
“Labor market strengthened and that economic activity has been expanding at a moderate rate. Job gains were strong in June following weak growth in May. On balance, payrolls and other labor market indicators point to some increase in labor utilization in recent months. Household spending has been growing strongly…”
That’s a step in the right direction after the slowdown we saw talked about in the June statement. The rest of the statement was basically unchanged, and really gave little forward guidance on when the next rate hike will take place. All we got was the Fed’s favorite mantra:
“In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation.”
Fed Fund Futures
Predictably, the Fed Fund futures rose a few points overnight. September and November both now have about a 25% chance of a rate hike. Those aren’t great odds, and even if things improve further, it’s really hard to imagine that the Fed would adjust monetary policy so close to the election. That leaves only December left. The long-time main contender for a 2016 rate hike, December now has a 41.6% chance of a quarter-point adjustment and an 8.7% chance of a half-point adjustment. It’s a toss up right now. The Fed must be feeling the pressure to hike, and with the data coming in line it’s definitely possible they will take action in December. A lot can happen between now and then. For now, we can continue to enjoy the low rate environment.
Freddie Mac PMMS shows rates rise again
It’s Thursday, and that means it’s time for another check-in with the Freddie Mac Private Mortgage Market Survey. The average rate on a 30-year fixed rate mortgage ticked up 3 basis points to 3.48% (0.5 points); the average rate on a 15-year fixed rate mortgage rose 3 basis points to 2.78% (0.5 points); and the average rate on a 5-year ARM was unchanged from the previous week at 2.78% (0.5 points).
Here’s what chief economist at Freddie Mac Sean Becketti said about the rather slow week for mortgage rates:
“The 10-year Treasury yield remained flat this week in anticipation of the Fed’s July policy meeting. Mortgage rates, on the other hand, rose another 3 basis points to 3.48 percent. Nonetheless, home sales continue to benefit from the persistently low mortgage rates with June’s new home sales coming in at an annualized rate of 592,000 homes – its fastest pace since 2008”
What does this mean for me?
Mortgage rates moved higher this week, but they’re still at levels that are historically very low. They seem to be on the rise at the moment and I think that you’re better off acting sooner rather than later if you’re trying to purchase a home or refinance your current mortgage.
Click here to get today’s latest mortgage rates.
Today’s economic data:
International Trade in Goods
- The international trade deficit widened to $-63.3 billion in June. Exports did make some gains, but they couldn’t outmatch the gains of imports.
Weekly Initial Jobless Claims
- Weekly jobless claims are up 14,000 to 266,000. The 4-week average moved lower by 1,000 to 256,500.
KC Fed Manufacturing Index
- The KC manufacturing index is back in the negative in July at -6. New orders, back orders, and employment are all in the red.
Notable events this week:
Monday:
- Dallas Fed Manufacturing Survey
Tuesday:
- S&P/Case-Shiller Home Price Index
- New Home Sales
- Consumer Confidence
- Richmond Fed Manufacturing Index
Wednesday:
- Durable Goods Orders
- EIA Petroleum Status Report
- FOMC Announcement
Thursday:
- International Trade in Goods
- Weekly Initial Jobless Claims
- KC Fed Manufacturing Index
Friday:
- GDP
- Chicago PMI
- Consumer Sentiment
from Total Mortgage Underwritings Blog http://ift.tt/2atq2HV
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