Here we go with another week. Current mortgage rates are dealing with the slightest bit of upward pressure this morning, as bond yields continue to push higher.
The rest of the week is somewhat light on economic data, but that doesn’t mean that mortgage rates won’t bound around at all. Read on for more details.
Where are mortgage rates going?
Rates flat to start the week – still poised to increase
Mortgage rates moved higher on Friday after a strong monthly jobs report for January got released, increasing investor optimism for more rate hikes from the Fed in 2018.
[tmslink name = “rates”]
If this trend holds over the next few days, that will mean another big spike for rates in the Freddie Mac Primary Mortgage Market Survey (PMMS). We’ve already seen the average rate on a 30-year fixed rate mortgage jump up twenty-seven basis points (one basis point = 0.01) since the first week of the year.
The average rates on a 30-year fixed rate mortgage made its way up to 4.22% (0.5 points) in last Thursday’s PMMS. With mortgage rates on the rise for four consecutive weeks now, one’s natural curiosity begins to wonder where and when the climb will end.
Given the market’s expectations for a strengthening economy and multiple increases to the federal funds rate throughout the year, the general consensus is that mortgage rates will continue to move higher as the year unfolds.
Trying to hang your hat on a narrow target for where mortgage rates will be in a few months, let alone a year, is a mostly losing game due to the many moving parts at play; however, predictions are still made and at the moment we’re seeing a few different sources calling for the 30-year fixed rate at 5.00% by the year’s end.
That would no doubt be a massive step up from where rates are right now, but it’s certainly not out of reach with the way rates have kicked off the year. In an environment of continually rising rates, the obvious best move is to lock in a rate as soon as possible before rates have a change to get any higher.
Of course, there are always personal factors that come into play with different borrowers, which is why talking through your scenario with a seasoned mortgage professional is extremely beneficial to determining your ideal path forward.
[contentbox id=”3″]
Federal Reserve has new chairman
The big news this morning out of the Federal Reserve is the swearing in of the newest Fed chairman, Jay Powell. You can read the full transcript of Powell’s first comments as chairman here.
It was a fairly brief and to the point opening statement, with Powell towing the party line on economic growth and price stability. Powell, who was already a member of the Fed (Fed Governor), takes on his new role at an interesting time for the U.S. economy, with the stock market struggling and bond yields rising.
On top of that, we’re only a little more than a month away from the Fed’s March meeting–when the FOMC is widely expected to raise the federal funds rate for the first time in 2018 by a quarter point.
Looking ahead to the rest of the week
We’ve actually got a fairly light week of economic data ahead of us. There aren’t any major market moving reports scheduled for release–only a small batch of minor reports that are unlikely to sway mortgage rates too far in either direction.
This does open up the door for international data and political events to have more of an influence on the markets. It also brings with it the potential for the status quo to continue, meaning last week’s bump higher from the monthly jobs report won’t be retreating back down.
Rate/Float Recommendation
Lock now before rates rise further
Current mortgage rates are poised to continue rising over the coming weeks and months. While there’s always the possibility that we will get a few dips here and there, the long term trend is certainly for rates to move higher.
If you’re looking to refinance or purchase a home in 2018, your best bet is likely going to be to lock in a rate sooner rather than later. As stated, many analysts have been calling for rates to hit 5% on a 30-year fixed rate.
Click here to head to our Mortgage Builder and figure out how much you could save.
Today’s economic data:
PMI Services Index
The PMI Services Index hit a 53.3 in January. That’s slightly below the prior reading and exactly what analysts had expected. This is a 9-month low.
ISM Non-Mfg Index
The Composite Index hit a 59.9 in January. That’s up from the prior revised reading of 56.0.
Get the GreenLight and close in 21 days*
Notable events this week:
Monday:
- PMI Services Index
- ISM Non-Mfg Index
Tuesday:
- International Trade
- Fedspeak
- JOLTS
Wednesday:
- Fedspeak
- EIA Petroleum Status Report
- 10-Yr Note Auction
Thursday:
- Fedspeak
- Jobless Claims
Friday:
- Nothing
[contentbox id=”3″]
from Total Mortgage Blog http://ift.tt/2E2uyxR
No comments:
Post a Comment