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?
August jobs report disappoints
After two months of solid gains, the labor market slowed in August, adding only 151,000 jobs. That’s 21,000 short of economists’ expectations for 175,000. The unemployment rate held steady at 4.9%, as did the participation rate at 62.8%. There’s always a lot of hype in the weeks and days leading up to the jobs report, and with all of the cheer-leading from Federal Reserve officials about a September rate hike, investors had an even closer eye than usual on today’s headline number. The report is far from dismal, but it’s clearly a blow to anyone trying to make the case for an increase to the federal funds rate at the FOMC meeting in two weeks.
Click here to get today’s latest mortgage rates.
In fact, as we can see in the Fed Fund futures, financial market participants became less optimistic about a rate hike at the next two FOMC meetings. The chance of a September rate hike slipped from 24.0% to 18.0%, and November’s chances went from about 30.0% to 26.0%. Interestingly enough, the Fed fund futures increased for December by about 1.0%. I never expected a September rate hike to happen, or even that it was on the table at all. In my mind, December has long been the only serious contender.
Treasury yields took an immediate tumble after the news broke, but have since rebounded. Investors are now putting more of their funds into the equities market, which caused all of the major U.S. indexes to open higher.
Looking back
Mortgage rates made modest gains this week, as we saw in the Freddie Mac Private Mortgage Market Survey (PMMS). The average rate on a 30-year fixed rate mortgage went up 3 basis points to 3.46% (0.5 points); the average rate on a 15-year fixed rate mortgage went up 3 basis points 2.77% (0.5 points); and the average rate on a 5-year ARM rose 8 basis points to 2.83% (0.4 points). That puts the 30-year fixed at 15 basis points above the all-time low of 3.31%.
Here is what Chief Economist at Freddie Mac, Sean Becketti, had to say about mortgage rates this week:
“The 10-year Treasury yield inched up in response to Fed Chair Janet Yellen’s speech last Friday then settled near last week’s average. The 30-year fixed-rate mortgage rose 3 basis points to 3.46 percent. Mortgage rates have hovered between 3.41 and 3.48 percent for the past ten weeks.”
Right now, mortgage rates actually seem to be trending slightly higher as we head into the weekend. There is, however, plenty of time today for things to change.
What does this mean for me?
The mortgage rate environment continues to be favorable toward borrowers. My recommendation right now is to take your time, but to act with some sense of timeliness, as it’s impossible to know when mortgage rates might spike back up.
Click here to get today’s latest mortgage rates.
Today’s economic data:
Employment Situation
As was stated above, 151,000 jobs were added to the U.S. economy in the month of August.
International Trade
International trade for July is at $-39.5 billion.
Fedspeak
Richmond Fed President Jeffrey Lacker is set to speak today at 1:00pm.
Notable events this week:
Monday:
- Personal Income and Outlays
Tuesday:
- S&P Case-Shiller HPI
- Consumer Confidence
Wednesday:
- Fedspeak
- ADP Employment Report
- Chicago PMI
- EIA Petroleum Status Report
Thursday:
- Jobless Claims
- PMI Manufacturing Index
- Consumer Comfort Index
- ISM Manufacturing Index
- Fedspeak
Friday:
- Employment Situation
- International Trade
- Fedspeak
from Total Mortgage Underwritings Blog http://ift.tt/2bHZmGd
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