Welcome to the Total Mortgage Current Mortgage Rates Blog. There’s some economic data out today, but first, your daily mortgage rate forecast/advice.
Where are mortgage rates going?
Fed Meeting and Jobs Report could put pressure on mortgage rates
FOMC meeting
There’s a lot going on this week. First up we have the Federal Reserve’s Federal Open Market Committee meeting on Tuesday and Wednesday. The announcement will come on Wednesday afternoon in the form of a written statement.
Click here to get today’s latest mortgage rates (May. 1, 2017).
There will be no Janet Yellen press conference following this meeting. Financial market participants are not expecting the Fed to raise rates at this meeting, as the 4.8% chance of the funds rate moving up to 75-100 bps in the CME Group’s Fed Fund futures show this morning. The significance for this meeting comes with its potential to either bolster or dampen expectations for the Fed’s next meeting on June 13-14.
Almost immediately following the Fed’s decision to raise rates in March, investors began to look toward June as the next most likely rate hike candidate. The Fed Fund futures currently give that meeting a 70% chance of a rate hike. At this point, the Fed doesn’t need to say much for the markets to continue pricing in another quarter point increase.
They’ve already made it clear that they feel the weak data (including a very low Q1 GDP estimate on Friday) is only temporary, and will eventually give way to a stronger economy. As always, the greatest chance of a jolt to the markets on Wednesday would be if the Fed made any surprising comments in its statement.
Mortgage rates are still near 2017 lows. See how low your rate could be.
It wouldn’t matter what side of the spectrum it was on–“June is firmly on the table.” or “We’re looking more carefully at our rate hike pace.”–any bold statements would likely send some ripples through the markets. Will that happen? It seems unlikely.
The more realistic scenario is that the Fed paints a cautious but optimistic picture of the economy and investors take that to mean that a June rate hike continues to be likely. This could put some upward pressure on mortgage rates. In general, the more hawkish the Fed comes off as, the more upward pressure on mortgage rates there will be.
Monthly Jobs Report for April
The monthly Employment Situation for April comes out this Friday at 8:30am sharp. Economists are calling for around 185,000 jobs added. That would be a substantial boost up from the disappointing 98,000 that we got in March. The unemployment rate, though, is expected to tick back up to 4.6% from 4.5%.
The jobs report is almost always the biggest market moving piece of economic data out every month, and it always poses a threat to mortgage rates. Positive economic data tends to move rates higher, so the better the report, the more we will see mortgage rates rise.
What does this mean for me?
Safe decision is to act now
There are quite a few opportunities for mortgage rates to rise this week. With rates in a holding pattern today (a pattern that could continue until the Fed’s meeting ends on Wednesday), it could be prudent for anyone looking to refinance or purchase to lock in a rate today. It’s possible that rates fall, but the more likely scenario is that they move higher.
If you want to get the most accurate idea of what kind of rate we could offer, you should fill out our short form and get a personalized rate quote. If you’d rather talk to someone, you can always call one of our experienced mortgage specialists.
Today’s economic data:
Personal Income and Outlays
It’s another lackluster economic report, this time from the Fed’s favorite inflation reading: the PCE price index. With personal income only rising 0.2%, and consumer spending unchanged in March, the PCE price index fell 0.2%, putting it at 1.8% year over year. Core PCE fell 0.1% month over month bringing it down to 1.6% year over year. It’s another report that lessens the urgency for the Fed to raise rates.
PMI Manufacturing Index
The PMI Mfg index came in exactly at the consensus for 52.8, but unfortunately that meant it fell five tenths from the prior reading.
ISM Manufacturing Index
The ISM Mfg index came in under the consensus of 56.5 at 54.8.
Construction Spending
Construction spending fell 0.2% month over month in March, putting it at 3.6% year over year.
Notable events this week:
Monday:
- Personal Income and Outlays
- PMI Manufacturing Index
- ISM manufacturing Index
- Construction Spending
Tuesday:
- FOMC Meeting Begins
Wednesday:
- FOMC Meeting Ends
- ADP Employment Report
- ISM Non Manufacturing Report
- EIA Petroleum Status Report
Thursday:
- International Trade
- Jobless Claims
Friday:
- Employment Situation
- Fedsoeak
from Total Mortgage Underwritings Blog http://ift.tt/2qp77EM
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