Welcome to the Total Mortgage 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 (Feb. 2, 2017).Where are mortgage rates going?
“You can’t always get what you want.” -Rolling Stones
The Federal Reserve’s Federal Open Market Committee (FOMC) wrapped up its two day meeting yesterday with a written statement. Financial market participants had been eagerly waiting, but without a description of a clear path ahead, the message from the Fed wound up disappointing.
It wasn’t as if the statement was overly dovish–it merely repeated the standard fed party line of assessing the economic data as it comes in and taking it from there. In today’s financial world, though, investors want clear forward guidance from the Fed.
March is the next meeting for the Fed, and some thought there was a chance the Fed would at least think about hiking rates then. With no mention of the meeting at all, investors are left with nothing to chew on. The Fed Fund futures is now giving March a 17.7% chance of a rate hike. It’s somewhat surprising that some investors had been expecting there to be any hint at a March hike, given all of the uncertainty stemming from the new administration.
The Fed has been treading a cautious path for years now, and there’s little reason to expect that will change. At the end of the day, nothing really changed for the rate hike picture: June remains the next greatest contender for an increase in the federal funds rate.
Click here to get today’s latest mortgage rates (Feb. 2, 2017).The statement’s release at 2pm had immediate effects on the market, sending treasury yields lower as investors moved back into government bonds. The yield on the 10-year U.S. Treasury note had been trading above 2.50% around midday, but once the news broke it slid down several basis points. Poor jobless claims data this morning has sent it even lower, and it now sits at 2.45%. Mortgage rates typically follow closely behind the 10-year yield, so it’s likely that mortgage rates are headed lower today.
Mortgage rates flat in Freddie Mac PMMS
The Freddie Mac Primary Mortgage Market Survey (PMMS) came out this morning (as it does every Thursday at 10am) and revealed that mortgage rates were mostly flat this week.
The average rate on a 30-year fixed rate mortgage was unchanged at 4.19% (0.5 points); the average rate on a 15-year fixed rate mortgage rose by one basis point to 3.41% (0.5 points); the average rate on a 5-year ARM moved up three basis points to 3.23% (0.4 points). Data for the survey is mostly collected on Monday and Tuesday, so it doesn’t reflect the Fed’s decision.
Here is what chief economist at Freddie Mac Sean Becketti had to say about the week:
“The 10-year Treasury yield fell 5 basis points this week following a tepid advance estimate of fourth-quarter GDP and the Fed’s decision to leave rates unchanged. The 30-year mortgage rate remained flat at 4.19 percent, starting the month 47 basis points higher than this time last year. Despite the uncertainty in the market, the pending home sales index increased 1.6 percent in December, up from a decline of 2.5 percent the month prior.”
What does this mean for me?
As I said yesterday, if the Fed comes off soft on rates, it could move rates lower and provide an opportunity for borrowers to lock in a low rate. The window might not be open for that long, though, as the January Jobs report gets released tomorrow and could send rates back up.
Today’s economic data:
Jobless Claims
Applications for U.S. unemployment benefits dropped 14,000 from the previous week to 246,000. The four-week moving average is now at 248,000.
Click here to get today’s latest mortgage rates (Feb. 2, 2017).Notable events this week:
Monday:
- Personal Income and Outlays
- Pending Home Sales
Tuesday:
- FOMC Meeting Begins
- S&P Case-Shiller HPI
- Chicago PMI
- Consumer Confidence
Wednesday:
- ISM Mfg Index
- EIA Petroleum Status Report
- ADP Employment Report
- FOMC Meeting Ends
Thursday:
- Jobless Claims
Friday:
- Monthly Jobs Report
- Fedspeak
from Total Mortgage Underwritings Blog http://ift.tt/2jZON1k
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