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?
September Jobs Report
It’s the first Friday of the month, and that means today is all about the Employment Situation Report from the Bureau of Labor Statistics (BLS). Economists were predicting that 170,000 jobs would be added, but the headline number ended up being 156,000. While 14,000 lower than expectations isn’t dreadfully below the target, it’s not a headline number anyone is going to boast about. The unemployment rate improved from 5.0% to 4.9%. The markets didn’t quite know what to make of the report. The yield on the U.S. 10-year treasury note spiked up before tumbling down. Right now it’s at 1.74%, which is two basis points above where it was at yesterday’s close.
The jobs report is arguably the most influential piece of economic data every month, with huge implications for Fed monetary policy. Already this morning, Cleveland Fed President Loretta Mester has come out stating that the September report is sufficient to warrant a rate hike. She stated on CNBC’s Squawk Box that “It’s a solid labor market report… This is very consistent with what we expected to see.” Mester was one of the three Fed officials who dissented at the meeting a few weeks back, so her remarks here are not that surprising. I imagine that this is the type of jobs report that does nothing to sway any of the FOMC members from their current positions.
The report was apparently good enough for financial market participants to grow more optimistic about the chances of a December rate hike. The Fed Fund futures currently have the chance of a December rate hike at 69.5%. That’s up from yesterday’s mark of 63.4%. It certainly seems like we are headed for a December rate hike, but there’s still a lot of time in between now and then. As always, we’ll get a clearer picture as time ticks on.
Click here to get today’s latest mortgage rates.
Looking back
The Freddie Mac Private Mortgage Market Survey (PMMS) came out on Thursday morning and revealed that mortgage rates hadn’t moved since the previous week. The average rate on a 30-year fixed rate mortgage stayed at 3.42% (0.5 points); the average rate on a 15-year rate remained at 2.72% (0.5 points); while the average rate on a 5-year ARM actually dropped by one basis point to 2.80% (0.4 points). With the yield on the U.S. 10-year treasury note (mortgage rates typically follow wherever the 10-year note yield goes) rising almost twenty basis points since last Friday, the fact that mortgage rates were flat is surprising.
It’s a reminder that the market doesn’t always act in ways that conventional wisdom would expect. Borrowers won’t mind the aberration, as it means that mortgage rates are continuing to hover just above 2016 lows. At 3.42%, the 30-year fixed is just one basis point above the 2016 low, and only eleven basis points off the all-time low.
What does this mean for me?
Mortgage rates continue to stay around 2016 lows as we head into the weekend. That’s good news for anyone looking to lock in a low rate on a purchase or refinance. I still think that mortgage rates are headed higher long-term, so I recommend acting sooner than later.
Click here to get today’s latest mortgage rates.
Today’s economic data:
Employment Situation
- 156,000 jobs were added.
- The unemployment rate is now 4.9%.
Fedspeak
- Fed Vice Chair Stanley Fischer will speak at 10:30am
- Cleveland Fed President Loretta Mester will speak at 12:45pm.
- Kansas City Fed President Esther George will speak at 3:00pm.
- Fed Governor Lael Brainard will speak at 4:00pm.
Notable events this week:
Monday:
- ISM Mfg Index
Tuesday:
- Fedspeak
Wednesday:
- ADP Employment Report
- International Trade
- EIA Petroleum Status Report
- Fedspeak
Thursday:
- Jobless Claims
- Long-Term Bond Announcements
Friday:
- Employment Situation
- Fedspeak
from Total Mortgage Underwritings Blog http://ift.tt/2dKuhll
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