Happy Friday, and welcome to the TMS current mortgage rates blog. There’s some economic data out today, but first, your daily mortgage rate forecast/advice.
Click here to get today’s latest mortgage rates.
Where are mortgage rates going?
Britain votes to leave the European Union
In a shocking turn of events, citizen’s of the U.K. have voted to leave the E.U., 52% to 48%. Before the voting began yesterday, the final polls did show that the vote was too close to call, but that doesn’t make the outcome any less surprising. Prime Minister David Cameron gave a speech shortly after the results were in stating that he plans to resign by October. The British pound has sunk down to levels not seen since 1985.
Scotland, which voted in large part to remain in the E.U., has already come out with talk about a referendum on independence from Britain.
Markets in the United States are all deep in the negative this morning. The DOW, NASDAQ, and the S&P 500 are all down around 2-3%.
Click here to get today’s latest mortgage rates.
10-year yield plummets
The yield on the U.S. 10-year Treasury note closed at 1.75%. Right now it’s trading at 1.58%. That’s a staggering drop, but it’s the kind of market volatility that was to be expected if the Brexit vote went through. Mortgage rates typically follow the 10-year yield, so this is good news for borrowers.
Fed Fund futures unchanged
The Fed Fund futures hadn’t seen much movement this week, but that’s all changed after the Brexit vote. The futures now show basically no hope for a 2016 rate hike. The chances for July, September, and November now stand at 0%. December currently has an 18.6% chance of a quarter-point rise.
Freddie Mac PMMS
The Freddie Mac Primary Mortgage Market Survey (PMMS) came out yesterday and it’s showing that rates edged up slightly higher this week. The average rate on a 30-year fixed rate mortgage rose 2 basis points to 3.56% (0.6 points). The average rate on a 15-year fixed rate mortgage went up 2 basis points to 2.83% (0.5 points). The average rate on a 5-year ARM was unchanged this week at 2.74% (0.5 points).
Obviously, the data for the report was collected before the market bombshell that is the Brexit vote occurred. It’s likely next week the PMMS will have rates lower.
What does this mean for me?
Mortgage rates are falling today. They’re back down around 2016 lows. I’d say that’s good news for borrowers looking to lock in a low rate or homeowners seeking to refinance. I expect market volatility to continue throughout the next week, so I’d recommend acting swiftly when presented with an opportunity to lock in a low rate.
Click here to get today’s latest mortgage rates.
Today’s economic data:
Durable Goods Orders are down
Durable goods fell -2.2% in May. That’s below the consensus for -0.7%. Core capital goods also fell 0.7% in May.
Consumer Sentiment
Consumer sentiment is still fairly strong at 93.5 in June.
Notable events this week:
Monday:
- Fedspeak
Tuesday:
- Janet Yellen Speaks
Wednesday:
- FHFA House Price Index
- Existing Home Sales
- Janet Yellen Speaks
- EIA Petroleum Status Report
Thursday:
- Jobless Claims
- PMI Manufacturing Index
- New Home Sales
Friday:
- Durable Goods Orders
- Consumer Sentiment
from Total Mortgage Underwritings Blog http://ift.tt/28VFXAw
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