Happy Friday, and 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?
A slew of bad economic data this morning has softened any expectations for a September rate and caused mortgage rates to fall down a few basis points.
Freddie Mac PMMS
On Thursday we had the pleasure of receiving the Freddie Mac Private Mortgage Market Survey (PMMS) at 10am sharp. Nothing of import had really transpired since the “strong” jobs report last Friday, and so it was expected that mortgage rates would be up from the previous PMMS. There were no disappoints with all of the readings moving higher.
The average rate on a 30-year fixed rate mortgage went up to 3.45% (0.5 points); the average rate on a 15-year fixed rate mortgage rose to 2.76 (0.5%); and the average rate on a 5-year ARM inched up to 2.74% (0.5 points).
Here is what Sean Becketti, Chief Economist at Freddie Mac, had to say about the rise in mortgage rates this week:
“A surprisingly strong July jobs report showed 255,000 jobs added and 0.3 percent wage growth from last month, exceeding many experts’ expectations. In response, the 10-Year Treasury yield rose to its highest level since June and the 30-year fixed-rate mortgage increased 2 basis points to 3.45 percent.”
As stated, the PMMS came out on Thursday, and the data for the report gets collected earlier in the week, so today’s poor economic data is not factored into those higher rates. In reality, current mortgage rates are slightly down from the PMMS rates. The yield on the 10-year U.S. treasury note is trading right now at 1.49%. That’s down about 7 basis points from where it was at yesterday’s close. Mortgage rates have a tendency to follow the 10-year yield wherever it goes.
Click here to get today’s latest mortgage rates.
Fed Fund Futures
Somewhat surprisingly, the Fed Fund futures have not declined at all from their positions before the poor retail sales report and disappointing PPI-FD. One would expect that they would have softened a bit. Of course, maybe that’s because the Fed Fund futures already had very little faith in September to begin with. At any rate, September, November, and December are currently being given a 12.0%, 13.8%, and 42.6% chance of a rate hike.
What does this mean for me?
Mortgage rates are heading lower this morning and that’s good news for borrowers. If you’re thinking about purchasing a home or refinancing your current mortgage, now is definitely a great time to do it. There’re plenty of opportunities to save on your monthly payment out there right now.
Click here to get today’s latest mortgage rates.
Today’s economic data:
Retail Sales
In a disappointing report, retail sales didn’t change in July. Economists had expected a rise of 0.4%. The report gets even worse when you factor out autos and retail sales dropped 0.3%. Less autos and gas came in at -0.1%. That’s the first decline for retail less autos since March. Apparently, consumers didn’t feel like spending their money on anything non-car related. Supermarkets, restaurants, sporting goods, and hardware stores all struggled in the month of July. The Fed is always looking for the consumer to spend their money (as they believe this to be the main driver of the economy), and will now be forced to soften their position on a September rate hike.
Producer Price Index – Final Demand
The producer price index report is also not pointing toward a September rate hike. Month over month, PPI-FD came in at -0.4% in July. That puts it at -0.2% year over year. PPI-FD less food and energy came in at -0.3% in July. That’s well below expectations for a 0.2% gain. Year over year, PPI-FD less food and energy is at 0.7%. PPI-FD less food, energy and trade services was unchanged in July, and stands at 0.8% year over year. The Fed hawks will not have much to chew on with this report.
Consumer Sentiment
Consumer sentiment is at 90.4 right now. That’s a modest gain of 0.4 from the previous reading. It seems like August is going to be a slow month for the consumer.
Notable events this week:
Monday:
- Labor Market Conditions Index
- Treasury auctions
Tuesday:
- Productivity and Costs
- Treasury auctions
Wednesday:
- Job Openings and Labor Turnover Survey
- EIA Petroleum Status Report
- Treasury auctions
Thursday:
- Weekly Initial Jobless Claims
- Import and Export Prices
Friday:
- Retail Sales
- Producer Price Index – Final Demand
- Consumer Sentiment
from Total Mortgage Underwritings Blog http://ift.tt/2aQl48O
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