News from across the pond is causing a sell-off in the bond market today, pushing treasury yields and mortgage rates higher. In fact, they are now very close to being back where they were before the big crash on Monday.
With rates back on the rise, we think that the smart decision for borrowers is to lock in a rate now before rates get any higher. Read on for more details.
Where are mortgage rates going?
Treasury yields move up toward week highs
It’s been a roller-coaster ride of a week with each day seemingly bringing a new rise or fall.
Today, the bond market is taking its cue from across the pond, as the Bank of England signaled that an uptick in inflation could translate into a faster rate hike schedule.
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This has caused a sell-off in Treasury notes, pushing yields higher. At the time of writing, the yield on the 10-year Treasury note (the best market indicator of where mortgage rates are going) is up over five basis points on the day, putting it at 2.88%.
That’s extremely significant, as that means it’s back up to the week’s high point, which was reached on Monday before the big decline. Mortgage rates have a tendency to move in the same direction as the 10-year yield, so rates are moving back up today.
Want to learn everything there is to know about a mortgage rate? Come take a look at our three-part video series!
We did get the Freddie Mac Primary Mortgage Market Survey (PMMS) out today, which showed yet another spike for mortgage rates. Here are the numbers:
- The average rate on a 30-year fixed rate mortgage jumped up ten basis points to 4.32% (0.6 points)
- The average rate on a 15-year fixed rate mortgage moved up nine basis points to 3.77% (0.5 points)
- The average rate on a 5-year adjustable rate mortgage ticked up four basis points to 3.57% (0.4 points)
Here is what Freddie Mac’s Economic & Housing Research Group had to say about current mortgage rates this week:
“The U.S. weekly average 30-year fixed mortgage rate rocketed up 10 basis points to 4.32 percent this week. Following a turbulent Monday, financial markets settled down with the 10-year Treasury yield resuming its upward march. Mortgage rates have followed. The 30-year fixed mortgage rate is up 33 basis points since the start of the year. Will higher rates break housing market momentum? It’s too early to tell for sure, but initial readings indicate housing markets are sustaining their momentum so far. The MBA reported that purchase applications are up 8 percent from a year ago in their latest Weekly Mortgage Applications Survey.”
This is now the fifth consecutive week that mortgage rates have moved higher in the PMMS. With Treasury yields moving higher today, the stage is setting for a sixth straight increase next week.
While the consensus for 2018 has long been for gradual increases to mortgage rates, the progression that we’ve seen so far has been much more rapid than expected. A thirty three basis point jump in the 30-year fixed rate since the beginning of January is not exactly a slow climb.
Click here to head to our Mortgage Builder and figure out how much you could save.
There is certainly the possibility that we eventually reach a sustained leveling out, and a modest climb resumes, but for now that doesn’t seem to be in the cards.
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Rate/Float Recommendation
Lock now before rates rise further
It’s another week and another rise in mortgage rates. Given that mortgage rates are expected to keep rising over the coming weeks and months, we think that it makes sense for anyone looking to purchase a home or refinance their current mortgage to lock in a rate sooner rather than later.
Find out how to get the best rate possible with our in-depth video series.
If you choose to keep waiting, there is the clear risk that rates will have risen by the time you decide to lock. Everyone’s situation is different, but we firmly believe that it’s in your best interest to take some time now and see what you can do.
It only takes a couple minutes online to get started or a quick phone call to a mortgage specialist to discuss your options.
Today’s economic data:
Fedspeak
- Dallas Fed President Robert Kaplan at 4:50am
- Philadelphia Fed President Patrick Harker at 8:00am
- Minneapolis Fed President Neel Kashkari at 9:00am
- Kansas City Fed President Esther George at 9:00pm
Jobless Claims
Jobless claims for the week of 2/3/18 came in at 221,000. That puts the four-week moving average at 224,500.
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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
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from Total Mortgage Blog http://ift.tt/2BP3rEY
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