Geopolitical tensions are running hot today, causing investors to move into government bonds. That’s putting downward pressure on mortgage rates, which are now at some of their lowest levels of the year. Read on for more details.
Where are mortgage rates going?
Rates plunge to start the short week
Geopolitical tension between the U.S. and North Korea has intensified over the past week, with the latest provocation coming over the weekend with the news out of Pyongyang that their largest-ever nuclear bomb was successfully tested.
Click here to get today’s latest mortgage rates (Sep. 5, 2017).
Predictably, U.S. officials were incensed and had some firm words for North Korea. Defense Secretary Jim Mattis said that there would be a “massive military response” if there were an attack on the U.S., Japan, or South Korea, while U.S. ambassador to the United Nations said that Kim Jong Un was “begging for war.”
All of this has caused financial market participants to take a risk-off attitude and rush into the perceived safety of government bonds. The yield on the 10-year Treasury note (which is the best market indicator of where mortgage rates are going) has fallen over seven basis points today and is currently sitting at 2.09%.
That’s the lowest level since just a few days after Trump was elected in November. Mortgage rates tend to move in the same direction as the 10-year yield, so rates are starting out the week at some of their lowest levels of the year.
How long they will stay this low depends on how the situation unfolds. Just as we saw last week when a similar pattern took hold, investors can regain their confidence fairly quickly as long as no further action takes place.
It’s very hard to hang your hat on that outcome right now, though, with Kim Jong Un being such a wildcard. Still, it does seem more likely than not that we will see rates move higher over the long-term.
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What does this mean for me?
Take advantage of these low rates
Mortgage rates have sunk to extremely accommodating levels. With the long-term trend still projected to be for rates to move higher, right now is the perfect time to take advantage of a downturn and lock in a rate.
It doesn’t matter if you’re looking to purchase a new home or refinance your current mortgage, the opportunity to save money in the years to come is definitely there for some borrowers.
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. Or, 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:
Fedspeak
Fed Governor Lael Brainard struck a cautious tone this morning, stating that inflation is still “well short” of the Fed’s target, meaning that the Fed should be “cautious about tightening policy further until we are confident that inflation is on track to achieve our target.”
Factory Orders
Factory orders fell one tenth more than was expected in July, with the headline reading at -3.3%.
Notable events this week:
Monday:
- Markets Closed: Labor Day
Tuesday:
- Fedspeak
- Factory Orders
Wednesday:
- International Trade
- PMI Services Index
- ISM Non-Mfg Index
- Beige Book
Thursday:
- Jobless Claims
- Productivity and Costs
- EIA Petroleum Status Report
- Fedspeak
Friday:
- Fedspeak
from Total Mortgage Underwritings Blog http://ift.tt/2gI9wK0
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