Happy Friday, and welcome to the Total Mortgage 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?
Treasury yields dipped in the early am today but have since climbed back up to just under yesterday’s close. The yield on the 10-year treasury note is currently trading at 2.59%, which is just five basis points off of the 52-week high that was set on Thursday morning.
Mortgage rates have a strong tendency to follow in the footsteps of the 10-year yield. With the FOMC raising the federal funds rate by a quarter percent to 0.5%-0.75%, bonds and mortgage rates both jumped up on Wednesday afternoon. The decision came as no surprise, but Fed chair Janet Yellen said enough to further bolster financial market participants into believing in several rate hikes in 2017.
Click here to get today’s latest mortgage rates.
As I said yesterday, I think there are several reasons to be skeptical of predictions for multiple rate hikes in 2017. The first being that the Fed has a history of making these types of claims and failing to deliver. Last year at this time they were singing the same tune. Many fed officials and pundits were championing upwards of four rate hikes in 2016, and ultimately, we wound up with just one.
I realize that this is now and that was then, but at the very least it’s worth noting that what they say does not always translate into what they do. The next reason to be skeptical is that long-term market predictions are incredibly difficult to make. It’s not the Fed’s fault–it’s just the nature of the beast. There are so many variables at play that it’s impossible to account for everything that will happen.
All it takes is one unknown to pop up and suddenly the whole forecast come crumbling down. As far as I’m concerned, any prediction that is over six months is more a mental exercise than it is a prediction of what’s to come.
Click here to get today’s latest mortgage rates.
Rates rise again in Freddie Mac PMMS
The Freddie Mac Primary Mortgage Market Survey came out on Thursday. Data for the report is collected early on in the week, and as such does not have the Fed’s rate hike decision priced into its findings (rates are actually several points higher).
It was the seventh consecutive week that mortgage rates moved higher. The average rate on a 30-year fixed rate mortgage went up three basis points to 4.16% (0.5 points); the average rate on a 15-year fixed rate mortgage rose one basis point to 3.37% (0.5 points); the average rate on a 5-year ARM ticked up two basis points to 3.19% (0.4 points).
Here is what Chief Economist at Freddie Mac Sean Becketti had to say about mortgage rates this week:
“As was almost-universally expected, the FOMC closed the year with its one-and-only rate hike of 2016. The consensus of the committee points to more rate hikes in 2017. However, the experience of this year combined with the policy uncertainty that accompanies a new Administration suggests a wait-and-see outlook.
This week’s mortgage rate survey was completed prior to the FOMC announcement. The 30-year mortgage rate rose 3 basis points on the week to 4.16 percent. The MBA’s Applications Survey posted drops in both refinance and purchase applications, registering the impact of recent mortgage rate increases. If rates continue their upward trend, expect mortgage activity to be significantly subdued in 2017.”
Click here to get today’s latest mortgage rates.
What does this mean for me?
Mortgage rates continue to climb higher and higher. As long as that trend keeps up I think that it makes sense for anyone looking to refinance or purchase a home to lock in a rate sooner rather than later.
Today’s economic data:
Housing Starts
Housing starts came in at 1.090 M for November, which is much lower than the 1.230 M that was expected. That’s a staggering 18.7% drop from the previous reading. The housing market has been experiencing some serious volatility lately, and right now it’s taken a swing for the worst.
Click here to get today’s latest mortgage rates.
Notable events this week:
Monday:
- Treasury Auctions
Tuesday:
- FOMC Meeting Starts
- NFIB Small Business Optimism Index
- Import and Export Prices
Wednesday:
- PPI-FD
- Retail Sales
- Industrial Production
- EIA Petroleum Status Report
- FOMC Meeting Ends/Janet Yellen Press Conference
Thursday:
- Consumer Price Index
- Jobless Claims
- Philly Fed Outlook
Friday:
- Housing Starts
from Total Mortgage Underwritings Blog http://ift.tt/2hDfjNp
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