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 keeps rates unchanged
The FOMC voted released a written statement at the conclusion of their two day meeting yesterday, in which they stated they are keeping the federal funds rate unchanged at 0.25-0.5 percent. The decision fell right in line with expectations, but there were some surprising surrounding details. The first of which is that three fed officials dissented. That has only happened three times in the last five years.
The votes to raise rates came from Kansas City Fed President Esther George, Cleveland Fed President Loretta Mester, and Boston Fed President Eric Rosengren. It’s not unusual to have one, maybe two, dissents, but any more than that shows that there is significant momentum for the rate hike camp. You have to think that there are other Fed officials who are on the cusp but just weren’t quite ready to make the vote. At any rate, no one saw that happening.
Click here to get today’s latest mortgage rates.
The next most surprising thing about the Fed’s statement (as always, I recommend checking out the Wall Street Journal’s fed statement tracker) was just how hawkish it was. The main added line was as follows:
“The Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives.”
It’s an interesting phrase. Janet Yellen stated later in her press conference that it’s better to “err on the side of caution.” That may be, but from the written statement it sounds like time is right for a rate hike but they just couldn’t bring themselves to do it. It’s about as hawkish a statement you could get without saying that your raising rates.
Strangely, though, the Fed did dial back their expectations for economic growth, stating that growth will now be 1.8%, as opposed to their forecast of 2% in June. That’s the third time this year they’ve decreased their expectations. The market’s reaction to the news was fairly tame.
Despite the intensely hawkish tone at this meeting, I still find it highly unlikely that the Fed will raise rates at their next meeting in November. That meeting falls just six days before the presidential election. The Fed can talk about being data dependent and separate from politics all they want, but I’m not convinced they feel confident enough to roll the dice like that. So on to December we go. According to the Fed Fund futures, that meeting has a 57.4% chance of a rate hike. Will it actually happen? Who knows. There’s plenty of time for something to shake things up.
Mortgage Rates are down in Freddie Mac PMMS
The Freddie Mac Private Mortgage Market Survey (PMMS) got released this morning and it’s showing that mortgage rates ticked lower this week. The average rate on a 30-year fixed mortgage fell two basis points to 3.48% (0.6 points); the average rate on a 15-year fixed mortgage went down one basis point to 3.76% (0.5 points); and the average rate on a 5-year ARM slid two basis points to 2.80% (0.5 points). That puts the 30-year fixed rate back in the 3.41%-3.48% range that it had been in for nearly three months. All of the data for the survey is collected early on in the week and therefore would not take into account any changes since the Fed’s decision.
Here’s what chief economist at Freddie Mac, Sean Becketti, had to say about mortgage rates this week:
“The 10-year Treasury yield declined after last week’s post-Brexit high in anticipation of the Fed’s September policy meeting. The 30-year fixed-rate mortgage followed Treasury yields, falling 2 basis points and settling at 3.48 percent. Despite the decrease in rates, the Refinance Index plunged 8 percent to its lowest level since June.”
Click here to get today’s latest mortgage rates.
What does this mean for me?
Mortgage rates are very low right now and there is no reason to think that they will rise anytime soon. Right now is a great time to lock in a low rate on a purchase for years to come. If you already have a mortgage and you haven’t looked into a refinance, you really owe it to yourself to spend a few minutes finding out if you could lower your monthly payments.
Click here to get today’s latest mortgage rates.
Today’s economic data:
Jobless Claims
New claims fell by 8,000 to 252,000 for the week of 9/17. That puts the 4-week moving average at 258,500.
Existing Home Sales
Existing home sales dropped by 0.9% in August to 5.33 million. That makes the year over year change at 0.8%.
Notable events this week:
Monday:
- Nothing
Tuesday:
- FOMC Meeting Begins
- Housing Starts
Wednesday:
- EIA Petroleum Status Report
- FOMC Meeting Concludes
Thursday:
- Jobless Claims
- Existing Home Sales
Friday:
- PMI Manufacturing Index
from Total Mortgage Underwritings Blog http://ift.tt/2cwkgH2
No comments:
Post a Comment