Mortgage rates are staying relatively flat as we start the week. We did, of course, get a significant push higher last week after investors caught wind of hawkish comments from several Federal Reserve officials.
With Treasury yields lingering at a potential tipping point, investors are on the edge of their seats right now as they wait and see how the situation unfolds. Read on for more details.
Where are mortgage rates going?
Rates hold near 2018 highs
Mortgage rates moved up to 2018 highs last week. Today, they are holding at those levels.
The focus for financial market participants is on the bond market, with the yield on the 10-year Treasury note (the best market indicator of where mortgage rates are going) approaching the crucial psychological threshold of 3.00%.
Right now, the yield is at 2.98%. That’s up nearly fifteen basis points from where it was this time last week. The big push higher took place last week after multiple Federal Reserve officials came out with hawkish statements on rate hikes and the U.S. economy.
These statements caught investors somewhat off guard and caused a snap in what was a several week long streak of Treasury yields and mortgage rates staying in a tight range.
Here are the numbers from the most recent Freddie Mac Primary Mortgage Market Survey on Thursday:
- The average rate on a 30-year fixed rate mortgage moved up five basis points to 4.47% (0.5 points)
- The average rate on a 15-year fixed rate mortgage ticked up seven basis points to 3.94% (0.4 points)
- The average rate on a 5/1-year adjustable rate mortgage rose six basis points to 3.67% (0.3 points)
From the looks of the economic calendar this week, there are a handful of reports out that could impact the direction of mortgage rates.
Most notably, we have the first estimate for first quarter GDP out early Friday morning. The consensus from market analysts is for GDP to have grown 2.0% from the previous quarter. That’s down from the previous quarter’s 2.9% rise but would still be a comfortable reading for investors.
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Rate/Float Recommendation
Lock now before rates move higher
Mortgage rates have jumped up once again and the spike might not be over just yet. With the yield on the 10-year Treasury note sitting just under 3.0%, investors are waiting to see what happens.
If that yield does cross over above 3.0%, that would almost certainly trigger another bond sell-off, causing the yield to jump further still. Mortgage rates typically move in the same direction as the 10-year yield and, as such, are also on the verge of surging higher.
If you want to avoid the risk of locking in after this happens, you should lock in your rate now. Despite what happens in the near-term, mortgage rates are still expected to move higher in the long run so locking in a rate sooner rather than later remains the smart decision for most borrowers.
Learn what you can do to get the best interest rate possible.
Today’s economic data:
Chicago Fed National Activity Index
The index came in lower than expected in March at 0.10. That puts the three month moving average at 0.27.
PMI Composite Flash
The composite flash hit 54.8 in April. Manufacturing hit 56.5. Services came in at 54.4. All in all, these readings were solid and basically came in right in line with what analysts had anticipated.
Existing Home Sales
Existing home sales came in at an annualized rate of 5.600 million for March. That’s an improvement from the prior month’s reading and above the 5.513 million that analysts had expected.
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Notable events this week:
Monday:
- Chicago Fed National Activity Index
- PMI Composite Flash
- Existing Home Sales
Tuesday:
- S&P Corelogic Case-Shiller HPI
- FHFA House Price Index
- New Home Sales
- Consumer Confidence
- Richmond Fed Manufacturing Index
Wednesday:
- EIA Petroleum Status
Thursday:
- Durable Goods Orders
- International Trade in Goods
- Jobless Claims
Friday:
- GDP
- Employment Cost Index
- Consumer Sentiment
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from Total Mortgage Blog https://ift.tt/2qQMsLy
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