Mortgage rates are holding higher on the week today.
Financial market participants are eagerly awaiting President Trump’s first State of the Union Address later today, an event that could cause mortgage rates to adjust depending on what is said.
Regardless, rates are expected to rise in the near and long term so we’re recommending borrowers lock in a rate sooner rather than later. Read on for more details.
Market Outlook 1.29.18 from Total Mortgage on Vimeo.
Where are mortgage rates going?
Rates hold higher
Yesterday, we saw a push higher for long-term government bond yields. The yield on the 10-year Treasury note (which is the best market indicator of where mortgage rates are going) moved up over 2.7% for the first time since 2014.
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Mortgage rates typically move in the same direction as the 10-year yield, and have been on the rise recently.
They’re a ways away from achieving multi-year highs, but the expectation is definitely for them to rise throughout 2018, possibly up past 5% for the 30-year fixed rate.
Investors are focused right now on Trump’s impending State of the Union Address. It’s his first, and while he could always say something to stir the pot, it seems as though he will try to steer clear from irking anyone during his speech, which most likely means a rather muted market reaction.
Looking ahead to the rest of the week, we have the FOMC meeting announcement tomorrow afternoon and the monthly jobs report for January on Friday as the two biggest chances for current mortgage rates to adjust.
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Rate/Float Recommendation
Lock now before rates get any higher
Mortgage rates are certainly on the rise so far in 2018 with no slowdown in sight. If you’re considering purchasing a home or refinancing your current mortgage, we strongly recommend that you try to lock in a low rate as soon as possible.
Click here to head to our Mortgage Builder and figure out how much you could save.
Today’s economic data:
FOMC Meeting Begins
The Federal Open Market Committee kicks off a two-day meeting today down in Washington, D.C.
It’s their first meeting of the year and the last meeting for out-going Fed Chair Janet Yellen. Yellen’s last day is on February 3, and will be succeeded by current Fed Governor Jerome Powell. The expectations for this meeting are fairly low as far as excitement goes.
The general consensus among analysts is that the Fed will keep the federal funds rate unchanged and reinforce the stance of three rate hikes in 2018. If this happens, we could possibly see a mild uptick in bond yields and mortgage rates.
Generally, the big market swings after FOMC meetings happen when the Fed throws a curve ball into the mix and talks about more or less rate hikes than expected.
Again, that’s not expected–but you never know, which is why you’ve got to tune in and find out what happens tomorrow afternoon when the meeting ends.
S&P Corelogic Case-Shiller HPI
Home prices rose 6.2% in November, according to the latest S&P Corelogic Case-Shiller Housing Price Index.
Consumer Confidence
Consumer confidence came in at 125.4 for January. That’s slightly higher than the prior month.
President Trump State of the Union Address
President Trump will give his first State of the Union Address tonight. That will obviously be an extremely well watched event, and as such, carries with it the possibility of a market reaction afterwards.
However, most sources believe that Trump will deliver a diplomatic speech that steers clear of any inflammatory statements.
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Notable events this week:
Monday:
- Personal Income and Outlays
- Dallas Fed Mfg Survey
Tuesday:
- FOMC Meeting Begins
- S&P Corelogic Case-Shiller HPI
- Consumer Confidence
- President Trump State of the Union Address
Wednesday:
- ADP Employment Report
- Employment Cost Index
- Chicago PMI
- Pending Home Sales Index
- EIA Petroleum Status Report
- FOMC Meeting Announcement
Thursday:
- Jobless Claims
- Productivity and Costs
- PMI Manufacturing Index
- ISM Mfg Index
- Construction Spending
Friday:
- Employment Situation
- Consumer Sentiment
- Factory Orders
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from Total Mortgage Blog http://ift.tt/2EoZsxA
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