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?
After a flight back to safety last week, investors are returning to risky assets. The S&P closed at a record high yesterday of 2,137.16. That’s slightly higher than the old record, set in May 2015, of 2,130.82. What has caused the return to risk? Well, we learned yesterday that Home Secretary Theresa May is poised to become the next Prime Minister in the UK. She could take over David Cameron’s post by as early as Wednesday night. With so much chaos happening across the pond, the fact that there is any political certainty is providing some relief to global markets. Sterling has recovered a bit and is mostly trading higher. It, of course, got absolutely hammered after the Brexit vote, making this recent recovery much needed. There’s no telling how long it will last, but for now, we’re working with positive news.
Click here to get today’s latest mortgage rates.
10-year yield jumps
What’s good for the economy is often bad news for mortgage rates. The yield on the U.S. 10-year Treasury note jumped up yesterday by its largest margin (+6.7 basis points) in almost two months. Government bonds are one of the “safe” investments that financial market participants sold off yesterday in favor of riskier assets. The yield continued to rise in overnight trading and is currently all the way up to 1.48%. It started the week around 1.38%. Mortgage rates tend to follow the direction of the 10-year yield so they are most likely moving higher right now. If this pattern continues throughout today and tomorrow, we should be seeing a rise in average mortgage rates in the Freddie Mac Private Mortgage Market Survey on Thursday.
Fed Fund futures
For the past week or so, the Fed Fund futures have been slowly retreating back from their complete dismissal of a 2016 rate hike. There still seems to be very little hope that it will happen, with the only chance still coming in December. Right now, the futures have the odds of a quarter-point rate hike at that meeting at 29.6%. That’s not great, but it is better than the less than 10% we were seeing a few weeks back.
Kansas City Fed President and notorious fed hawk Esther George spoke yesterday and–surprise, surprise–said that interest rates are too low. She once again cited her concerns that low rates are creating too much unnecessary risk.
What does this mean for me?
Mortgage rates are on the rise, but they have a ways to climb before they anywhere close to levels that would be considered high. It’s still a great time to see if you can save money with a refinance or to lock in a low rate on a purchase. It’s still incredibly difficult to predict where mortgage rates will be in a few weeks, let along a couple months, but as we’re seeing this week, rates can rise at a moment’s notice.
Click here to get today’s latest mortgage rates.
Today’s economic data:
Job Openings and Labor Turnover Survey
Job opening dropped down to 5.500 million in May from April’s 5.845 million.
Treasury auctions
There will be a 4-week Bill Auction at 11:30 AM and a 10-Year Note Auction at 1:00 PM.
Fedspeak
St. Louis Fed President James Bullard spoke this morning and said that he was still in favor of a single interest rate hike view, despite the June jobs report coming in well above expectations. He never mentioned the jobs report specifically, but he’s obviously aware of it and clearly thinks that it doesn’t warrant an adjustment to his opinion on policy. To be fair, the strong jobs report had very little effect on the markets.
Minneapolis Fed President Neel Kashkari speaks today at 5:30 PM and Cleveland Fed President Loretta Mester is set to speak tonight at 10:30 PM.
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/2a5TSkE
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