Mortgage rates are on the rise today after a very solid monthly jobs report for January got released early in the morning. It’s been a notable week for the market, with the 10-year yield surging to a four-year high.
Mortgage rates tend to move in the same direction as the 10-year yield, and have similarly jumped higher this week. Read on for more details.
Where are mortgage rates going?
Rates increase to finish out the week
A strong monthly jobs report for January is causing financial market participants to sell off more bonds, pushing Treasury yields up to levels not seen since 4-years ago.
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Right now, the yield on the 10-year Treasury note (the best market indicator of where mortgage rates are going) is up to 2.84%. That’s five basis points higher (one basis point = 0.01) than where it was at the start of the day, and about sixteen basis points above where it started the week.
Typically, mortgage rates move in the same direction as the 10-year yield, so they’re dealing with some upward momentum as the weekend rapidly approaches.
As we’ve seen over the past several weeks, mortgage rates are on a bit of a run here, with the Freddie Mac Primary Mortgage Market Survey (PMMS) showing the average rate on a 30-year fixed rate up twenty seven basis points since the first survey of the year.
Here are the numbers from this week’s survey, released yesterday:
- The average rate on a 30-year fixed rate mortgage jumped up seven basis points to 4.22% (0.5 points)
- The average rate on a 15-year fixed rate mortgage moved up six basis points to 3.68% (0.5 points)
- The average rate on a 5/1-year adjustable rate mortgage ticked one basis point higher to 3.53% (0.4 points)
Here is what the Freddie Mac Economic & Housing Research Group had to say about mortgage rates this week:
“The Federal Reserve did not hike rates this week, but the market views future hikes as a near certainty. The expectation of future Fed rate hikes and increased borrowing by the U.S. Treasury is putting upward pressure on interest rates. The 30-year fixed rate mortgage is up over a quarter of a percentage point (27 basis points) from the first week of the year. 30-year fixed mortgage rates have increased for four consecutive weeks and are now slightly above where they were last year at this time.”
Mortgage rates expected to continue rising
With a strong monthly jobs report pushing mortgage rates even higher, we could certainly see another big jump next week in the PMMS. It’s important to note that there doesn’t seem to be a clear end in sight for this upward push.
Many analysts are calling for rates to continue rising throughout 2018, with both the Mortgage Bankers Association and Realtor.com are both predicting the 30-year fixed rate to hit 5%.
So if you step back and look at the bigger picture–yes rates have moved higher, but they’re at significantly lower levels right now than where they are expected to be by the end of the year.
It’s true that predicting where mortgage rates will go can be incredibly difficult, but so far this year the predictions for rising rates have come true.
Everyone’s situation is different when it comes to refinancing and purchasing, so there’s no one size fits all response to the current trend in rates; however, it’s in the best interest of homeowners and potential buyers to take some time and crunch the numbers to see what the best path forward is.
If you don’t want to scribble out the numbers on pen and paper, our Purchase and Refinance Calculators can take care of the job for you. Of course, we know there are some questions that a calculator can’t answer, so don’t hesitate to reach out.
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Rate/Float Recommendation
Lock now before rates move even higher
Mortgage rates are on the rise. It’s been a steady climb all month, and as we’ve seen over the past couple weeks things have really picked up. Now, with more healthy numbers coming out of the labor market, there’s fresh life flowing into the rise.
If you’re planning on buying a home or refinancing your current mortgage, you should seriously consider taking action and locking in a rate soon to try and get the best deal.
It only takes a few minutes online with our Mortgage Builder or a quick phone call with one of our mortgage specialists to get started. Even if you’re getting ready to buy this spring, there are some steps you should be taking right now–like getting pre-approved–to position yourself for success when the time comes.
Click here to head to our Mortgage Builder and figure out how much you could save.
Today’s economic data:
Employment Situation
The monthly jobs report for January showed that 200,000 jobs were added. That’s a solid step up from the 175,000 that analysts had predicted. The unemployment rate held steady at 4.1%, and average hourly earnings rose 0.3%. It’s a strong report that points toward a strengthening U.S. economy.
Consumer Sentiment
The consumer sentiment index for January came in at 95.7. That’s slightly above the consensus for 95.0 and keeps the reading near all-time high levels.
Factory Orders
Factory orders for December rose 1.7%. That’s a little more than the 1.5% that analysts had projected.
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Notable events this week:
Monday:
- Personal Income and Outlays
- Dallas Fed Mfg Survey
Tuesday:
- FOMC Meeting Begins
- S&P Corelogic Case-Shiller HPI
- Consumer Confidence
- President Trump State of the Union Address
Wednesday:
- ADP Employment Report
- Employment Cost Index
- Chicago PMI
- Pending Home Sales Index
- EIA Petroleum Status Report
- FOMC Meeting Announcement
Thursday:
- Jobless Claims
- Productivity and Costs
- PMI Manufacturing Index
- ISM Mfg Index
- Construction Spending
Friday:
- Employment Situation
- Consumer Sentiment
- Factory Orders
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from Total Mortgage Blog http://ift.tt/2GIclDE
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