Happy Friday everyone, and welcome to the TMS current mortgage rates blog. There’s some economic news out today, but first, your mortgage rate forecast/advice.
Click here to get today’s latest mortgage rates.
Where are mortgage rates going?
Dismal May Jobs Report
Ouch. In a maddening turn of events, the May employment situation (a.k.a. the jobs report) showed that a measly 38,000 jobs were added, compared to the 162,000 that was expected. Almost half a million people left the labor force. The unemployment rate is at 4.7%. We also learned that the prior two months were revised lower by a total of 59,000. It’s the worst jobs report since September 2010.
With the Fed relying so heavily on a strong labor market, the report is a dagger to straight to the heart of the chances of a June rate hike, and in all likelihood, a rate hike in July. The Fed Fund futures, which reflect the market’s belief in the chances of a rate hike, have fallen to 4% for June, from 21% before the report. July is now at 36%, from 58%. Janet Yellen is set to speak in Philadelphia on Monday, and could possibly use the opportunity to outline why she believes so few jobs were added. I’m sure she can’t wait.
Naturally, the markets haven’t taken to kindly to the news and are all currently trading in the red. The U.S. 10-year Treasury yield plummeted down 10 basis points to 1.80% to 1.70%. We’ll see what happens throughout the day, but mortgage rates follow the lead of the 10-year yield, so if the trend continues, that’s good news for borrowers.
Click here to get today’s latest mortgage rates.
Freddie Mac PMMS has rates up slightly–but there’s a catch
The Freddie Mac Primary Mortgage Market Survey came out on Thursday morning at 10 AM as it wont to do every week, and it showed that mortgage rates went up slightly:
- The average rate on a 30-year fixed rate is 3.66%
- The 15-year fixed is 2.89%.
- The average rate on a 5-year ARM is 2.88%
- All were factored with 0.5 points.
The only catch is that today’s terrible jobs report throws a wrench into the PMMS. Mortgage rates have dropped along with the rest of the market, so I’d take several basis points of off each of those averages to get a more accurate representation.
What does this mean for me?
It’s great news. As of right now, mortgage rates are down. They had been moving slightly higher the past couple of weeks, but today’s jobs report popped that balloon, and now we’re quite possibly below 2016 lows. That means there is ample opportunity for folks with a high mortgage rates to call and see if they can save on their monthly payments with a refinance. The opportunity is also there for homebuyers who want to lock in a low rate for years to come. We’ll see what happens next week, but for now, I think that you’re better off acting sooner than later.
Click here to get today’s latest mortgage rates.
Today’s economic data:
Terrible Nonfarm Payrolls Report
- A.k.a. the May jobs report, the nonfarm payrolls report was discussed above due to its influence on the direction of mortgage rates.
International Trade Narrower than Expected
- The U.S. trade deficit came in at $-37.4 B in April.
Factory Orders Rise
- Factory orders went up 1.9% in April, mostly due to orders for civilian aircraft.
ISM Non-Manufacturing Index
- The ISM non-manufacturing index is at 52.9, which is below the consensus for 55.5.
Click here to get today’s latest mortgage rates.
Notable events this week:
Monday:
- Markets Closed – Memorial Day
Tuesday:
- Personal Income and Outlays
- S&P/Case-Shiller Home Price Index
- Chicago PMI
- Consumer Confidence
- Dallas Fed Manufacturing Survey
Wednesday:
- PMI Manufacturing Index
- ISM Manufacturing Index
- Construction Spending
Thursday:
- ADP Employment Report
- Weekly Initial Jobless Claims
- EIA Petroleum Status Report
Friday:
- Nonfarm Payrolls Report
- International Trade
- Factory Orders
- ISM Non-Manufacturing Index
from Total Mortgage Underwritings Blog http://ift.tt/1t6puz0
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