Welcome to the Total Mortgage Current Mortgage Rates Blog. There’s some economic data out today, but first, your daily mortgage rate forecast/advice.
Where are mortgage rates going?
Monthly jobs report big threat to rates this week
U.S. markets are closed today in observance of Memorial Day.
Looking ahead to the rest of the week we’ve got a decent amount of economic data packed into four days. While there are mini-market movers getting released every day, the biggest threat to rising mortgage rates is the Employment Situation (a.k.a. the monthly jobs report) on Friday.
Click here to get today’s latest mortgage rates (May. 29, 2017).
It’s the last monthly jobs report before the Fed’s FOMC meeting on June 12-13, and could put any remaining doubts about a quarter point increase in the target federal funds rate to rest. Economists are calling for 185,000 private sector jobs added in May, which would be a nice follow-up to the 211,000 that were added in April.
If average hourly earnings and the unemployment rate don’t do anything funny, that would further bolster the Fed hawk’s position. It’s always interesting watching the ebb and flow of the CME Group’s Fed Funds futures. About a month ago nearly everyone agreed that a rate hike would happen.
Then we got a series of geopolitical events and some soft economic data to boot and suddenly the doubts began to creep in. Fed officials began to more explicitly discuss the possibility that it might not be appropriate to hike in June. We never saw a dip back under a 50% chance in the Fed Funds futures, but fluctuations of 20 percentage points did occur.
Find out what your custom mortgage rate would be.
Right now, the markets have the probability of an increase up to 1.00%-1.25% at about 84%. That’s basically a sure thing when it comes to the Fed Funds futures.
So what does this mean for mortgage rates?
Well, typically when the economy is doing well (thus, warranting further monetary tightening) investors move more into stocks and out of bonds. This drives bond prices down and yields up.
Since mortgage backed securities compete for many of the same investors, one would expect mortgage rates to rise along with treasury yields. The changes are usually not identical, but the overall trends are usually the same.
The takeaway here is to keep an eye on employment data this week. The ADP employment report comes out on Thursday, and while it’s not always an accurate predictor of what we’ll see in the monthly jobs report the next day, many investors will move off of that report.
Obviously, Friday morning at 8:30am is the big report of the week, and will likely lead trading as we head into the weekend.
What does this mean for me?
Mortgage rates still near 2017 lows
In case you missed, mortgage rates fell to new 2017 lows in the Freddie Mac Primary Mortgage Market Survey last Thursday.
That’s great news for anyone looking to refinance their current mortgage or purchase a new home. Anyone who doesn’t want to deal with the risk of rising rates on Thursday or Friday should lock before then.
To get the most accurate idea of what kind of rate we could offer, you should fill out our short form and get a personalized rate quote. If you’d rather talk to someone, you can always call one of our experienced mortgage specialists.
They can walk you through the same process, clarifying any questions you may have, and let you know what your custom rate quote is.
Today’s economic data:
- Markets Closed: Memorial Day
Notable events this week:
Monday:
- Markets Closed: Memorial Day
Tuesday:
- Personal Income and Outlays
- S&P Corelogic Case-Shiller HPI
- Consumer Confidence
Wednesday:
- Fedspeak
- Chicago PMI
- Pending Home Sales Index
- Beige Book
Thursday:
- ADP Employment Report
- Jobless Claims
- Productivity and Costs
- PMI Manufacturing Index
- ISM Mfg Index
- Construction Spending
- EIA Petroleum Status
Friday:
- Monthly Employment Situation
- International Trade
from Total Mortgage Underwritings Blog http://ift.tt/2rOcHnB
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