Investors dealt with escalating geopolitical tension yesterday with a massive bond rally that pushed the 10-year yield down to a low not seen since early November. This put downward pressure on mortgage rates, which are currently sitting at some of the best levels all year. Read on for more details.
Market Outlook 9.5.17 from Total Mortgage on Vimeo.
Where are mortgage rates going?
Rates stay down near 2017 lows
The geopolitical tension between North Korea and the U.S. caused a massive rally in Treasuries yesterday as investors took a risk-off position. The yield on the 10-year Treasury note (the best market indicator of where mortgage rates are going) fell down to a 10-month low at 2.07%.
Click here to get today’s latest mortgage rates (Sep. 6, 2017).
With North Korea continuing to hang around and provoking the U.S. with nuclear missile tests, investors are wary to take on too much risk right now. Mortgage backed securities compete for similar investors as the 10-year yield, and therefore mortgage rates tend to move in the same direction.
That means that rates dropped down to very accommodating levels yesterday. So far today not much has changed. The 10-year Treasury note is up about one basis points.
The ISM Non-Mfg Index got a lot of attention this morning but the headline reading came in slightly below expectations, and is therefore failing to kick the markets into gear. The Fed’s Beige Book will be released this afternoon but it’s unlikely anecdotal evidence about the economy will be a force in today’s market.
In the grand scheme of things, the relative calm in the market right now is great news for borrowers, as it means that rates are continuing to hover down near year lows.
We very well could keep close to these levels as the rest of the week unfolds, but there is so much uncertainty surrounding the geopolitical chessboard that it’s hard to state with 100% confidence where rates are headed.
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What does this mean for me?
Take advantage of these low rates
Mortgage rates are down at some of the best levels of the year. It doesn’t take a seasoned homebuyer to understand that that’s great news for anyone looking to purchase or refinance.
Rates are incredibly fickle, so there’s really no telling when they will spike back up. Our recommendation right now is for borrowers to find out what their rate would be and to lock soon if they like what they see.
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:
International Trade
The U.S. trade deficit barely widened in July going from $43.6 billion to $43.7 billion.
PMI Services Index
The PMI services index came in at 56.0 for August. That’s about one point below what analysts had projected, but up 1.3 points from the prior reading.
ISM Non-Mfg Index
The ISM-Non Mfg index came in at 55.3, which is a half point below what was expected.
Beige Book
The Fed’s Beige Book, which contains anecdotes about the state of the economy in various Fed regions, will be released at 2:00pm.
Notable events this week:
Monday:
- Markets Closed: Labor Day
Tuesday:
- Fedspeak
- Factory Orders
Wednesday:
- International Trade
- PMI Services Index
- ISM Non-Mfg Index
- Beige Book
Thursday:
- Jobless Claims
- Productivity and Costs
- EIA Petroleum Status Report
- Fedspeak
Friday:
- Fedspeak
from Total Mortgage Underwritings Blog http://ift.tt/2xOtqHF
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