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?
There were no surprises yesterday; the Federal Reserve increased the federal funds rate to 0.5%-0.75%, just as everyone thought that they would. The written statement talked about strength in the labor market, evidenced by job gains and a dropping unemployment level, as well as a positive outlook on inflation, when backing up their decision. The whole statement was fairly cut and dry, and the decision was unanimous.
After starting out the year with much talk about upwards of four rate hikes, yesterday’s increase marked the first hike of the year, and only the second hike of the decade. It’s a nod toward what the Fed feels is a strengthening economy, and while borrowers might not want higher rates, the news should be seen as a good thing. Of course, a quarter point rise still doesn’t even bring the benchmark interest rate up to 1%, so one can hardly say that rates are no longer accommodating.
Click here to get today’s latest mortgage rates.
What’s the outlook for 2017? Fed officials are now calling for three or more gradual rate increases over the course of the year. That’s an upward revision from what officials stated in September. Whether or not it will actually happen is another story altogether. As stated, we went through the same song and dance last year and wound up with only one rate hike.
It’s true that election years tend to lean more toward the conservative side (despite what the Fed might claim), and that President-elect Trump is talking up a big game on fiscal stimulus, but I think that having a skeptical attitude is not only reasonable right now, it’s healthy. There are innumerable events over the coming months that could derail the Fed’s plans to continue monetary tightening, making any predictions over six months more of a mental exercise than practical advice.
Freddie Mac PMMS
The Freddie Mac Primary Mortgage Market Survey (PMMS) got released this morning and once again (surprise, surprise) is showing that mortgage rates moved higher this week. The average rate on a 30-year fixed rate mortgage rose three basis points to 4.16% (0.5 points); the average rate on a 15-year fixed rate mortgage went up one basis point to 3.37%; while the average rate on a 5-year ARM ticked up two basis points to 3.19% (0.4 point). That’s now the seventh week in a row that mortgage rates have moved higher.
It’s true, the increase was modest this week, largely due to little action while the markets waited for the Fed decision. It’s also true that this report does not have that decision priced into it. With bonds selling off after the decision was announced, mortgage rates are no doubt higher by several basis points than what they appear in the PMMS.
What does this mean for me?
As long as mortgage rates keep on rising I’ll keep on offering up the same advice: if you’re looking to refinance your current mortgage or purchase a home, you’re more likely to get a better deal on a rate if you lock sooner rather than later.
Today’s economic data:
Consumer Price Index
CPI went up 0.2% in November, putting it at 1.7% year over year. CPI less food and energy went up 0.2% in November, bringing it up to 2.1% year over year.
Jobless Claims
Applications for unemployment benefits are at 254,000 for the week of 12/10. That’s right in the middle of the consensus range and 4,000 below last week’s reading. The four-week moving average is now at 247,750.
Philly Fed Outlook
The Philly Fed Index jumped up to 21.5 in December. That’s nearly triple the prior reading and more than double what economists had expected.
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/2hK4Jal
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