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 are on the rise this morning
Today is the first Friday of the month, and that means that the July non-farm payrolls report got released. For the second month in a row the headline reading has come in far above expectations. Economists were predicting 185,000 jobs and their turned out to be 255,000 jobs added. That’s even well outside the high end of the consensus range of 215,000. The unemployment rate stayed at a healthy 4.9%, and average hourly earnings had a gain of 0.3%. In more good news, the last non-farms paryrolls report in June got adjusted 5,000 higher to 292,000.
U.S. 10-year yield
Long-term government bond yields rose after the release of the non-farm payrolls report. The 10-year yield started the morning just under 1.50% and is now trading at 1.56%. Mortgage rates follow the path of the 10-year yield so unfortunately the good jobs report is driving rates higher.
Click here to get today’s latest mortgage rates.
Fed Fund Futures
A 2016 rate hike is always on the minds of financial market participants, and with the jobs report exceeding expectations, the chances of that event transpiring become greater. The CME Group’s fedwatching tool is without a doubt the place to look to get a reading on what the markets are feeling. As one would expect, the markets have grown more optimistic about 2016’s chances. The futures for all the meetings gained about 5% after the jobs report. That puts September, November, and December at 18.0%, 19.3%, and 46.5%. We’re still very far away from December, but things are looking better today than they did yesterday.
Freddie Mac PMMS shows rates dipping back down
A week from today we got a disappointing GDP that brought treasury yields and mortgage rates down. With such little data out this week it wasn’t much of a surprise that mortgage rates stayed around those levels all week.
The Freddie Mac Private Mortgage Market Survey (PMMS) (which gets released every Thursday at 10am) now has the average rate on a 30-year fixed rate mortgage at 3.43% (0.5 points); the average rate on a 15-year fixed rate mortgage is 2.74% (0.5 points); and the average rate on a 5-year ARM is 2.73% (0.5 points). It was the first time in two weeks that mortgage rates dipped lower. Of course, with the release of the very strong non-farm payrolls report, mortgage rates are back on the rise.
Here is what Chief Economist at Freddie Mac Sean Becketti had to say about the drop in mortgage rates this week:
“Treasury yields fell last week following both the FOMC’s meeting and a disappointing advance estimate for second quarter GDP. Mortgage rates, which had moved up 7 basis points over the past three weeks, responded by erasing most of those gains, falling 5 basis points to 3.43 percent this week for the 30-year fixed-rate mortgage. Mortgage rates have been below 3.5 percent every week since June 30. Borrowers are taking advantage of these low rates by refinancing. The latest Weekly Applications Survey results from the Mortgage Bankers Association show refinance activity up 55 percent since last year.”
What does this mean for me?
Mortgage rates might have risen a few basis points this morning but they are still at very low levels historically. If you are a prospective buyer on the hunt for a house or a homeowner looking to refinance your current mortgage, now is a great time to do it.
Click here to get today’s latest mortgage rates.
Today’s economic data:
Nonfarm Payrolls
The non-farm payrolls report (which added 255,000 jobs this month), was discussed in the above section due to its relevancy to the mortgage rates outlook.
International Trade
The trade gap grew in June to $-44.5 billion.
Notable events this week:
Monday:
- PMI Manufacturing Index
- ISM Manufacturing Index
Tuesday:
- Personal Income and Outlays
Wednesday:
- ADP Employment Report
- ISM Non-Manufacturing Index
Thursday:
- Weekly Initial Jobless Claims
- Factory Orders
Friday:
- Nonfarm Payrolls
- International Trade
from Total Mortgage Underwritings Blog http://ift.tt/2aDDbiy
No comments:
Post a Comment