Inflation data today came in below expectations and is putting downward pressure on mortgage rates. That’s good news for borrowers, as it’s keeping rates near 2017 lows. Read on to get all the details.
Where are mortgage rates going?
Rates head down toward 2017 lows
Geopolitical tension between North Korea and the United States caused investors to move into the safe haven of government bonds yesterday. That put downward pressure on mortgage rates early in the morning, but as the day unfolded and tensions eased, rates slowly edged higher and finished the day just about flat.
Click here to get today’s latest mortgage rates (Aug. 10, 2017).
Today we got the first bit of inflation data (PPI-FD) and, unfortunately for the Fed, it’s below expectations with a 0.1% monthly decline. The yield on the 10-year Treasury note (the best market indicator of where mortgage rates are going) is down a little over one basis point right now as investors deal with another weak economic report.
With the labor market continuing to post healthy numbers, stagnant inflation data has seemingly been the only factor keeping the Fed from raising rates. For much of 2017 we had heard optimistic comments from the Fed that inflation is low but will certainly pick up as the year progresses.
Now, as time ticks on and on with inflation failing to move higher, the Fed has been left with no choice but to acknowledge that the next rate hike might be further out than once thought. The CME Group’s Fed Funds futures are currently showing about a 44% chance of a quarter point increase at the Fed’s December meeting.
That number has been trending lower over the past few days. There is definitely a lot of time between now and December (including two Fed meetings), so it’s not out of the realm of possibility for the current situation to reverse itself, but that’s not an outcome you would want to hang your hat on.
In general, mortgage rates move higher as positive data comes out and the economy improves. With inflation continuing to struggle, it seem as though mortgage rates might stay lower for longer.
[contentbox id=”6″]
Rates move lower in PMMS
Mortgage rates mostly ticked down toward 2017 lows in the Freddie Mac Primary Mortgage Market Survey today. Here are the numbers:
- The average rate on a 30-year fixed rate mortgage fell three basis points to 3.90% (0.5 point)
- The average rate on a 15-year fixed rate mortgage stayed the same at 3.18% (0.5 point)
- The average rate on a 5-year adjustable rate mortgage dropped one basis point to 3.14% (0.5 point)
The 30-year is now only two basis points above the year low posted back in the beginning of June. Here is what chief economist at Freddie Mac, Sean Becketti, had to say about rates this week:
“After holding relatively flat last week, the 10-year Treasury yield fell 4 basis points this week. The 30-year mortgage rate moved in tandem with Treasury yields, dropping 3 basis points to 3.90 percent. Earlier this week, Federal Reserve officials highlighted the influence of continued weak inflation data on rates.”
What does this mean for me?
Perfect time to lock in a rate
Mortgage rates are continuing to stay down near 2017 lows. That’s great news for anyone who is currently on the market for a purchase or refinance. While it does seem that rates will stay at accommodating levels for some time now, the long-term trend remains for rates to rise.
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. Or, if you’d rather talk to someone, you can always call one of our experienced mortgage specialists.
They can walk you through the same process, clarifying any questions you may have, and let you know what your custom rate quote is.
Today’s economic data:
PPI-FD
PPI-FD failed to come in with a monthly gain of 0.1%. Instead, we got a 0.1% decline, putting the yearly change at 1.9%. It’s just one more disappointing inflation report.
Fedspeak
- New York Fed President William Dudley at 10:00am
Notable events this week:
Monday:
- Fedspeak
Tuesday:
- JOLTS
Wednesday:
- Productivity and Costs
- EIA Petroleum Status Report
- Fedspeak
Thursday:
- PPI-FD
- Fedspeak
Friday:
- Consumer Price Index
- Fedspeak
from Total Mortgage Underwritings Blog http://ift.tt/2utoupm
No comments:
Post a Comment