The 10-year Treasury note, which is the best market indicator of where mortgage rates are going, is approaching 3.0% and investors are closely monitoring the situation.
We could see mortgage rates move higher if this event unfolds today so it’s important to stay informed on what’s happening. Read on for more details.
Where are mortgage rates going?
Rates still holding higher
Financial market participants are continuing to keep their eye on the 10-year Treasury note yield as it sits just below the key psychological threshold of 3.0%, at 2.99%.
At this point, it seems like only a matter of time before it nudges up one more basis point (although yesterday it did manage to endlessly linger close where it is now).
While there has certainly been quite a fuss made over this event, there is still a debate over what it will actually mean as we move forward through 2018.
The dichotomy is on clear display when you compare article headlines such as “The 10-year Treasury yield is inches away from 3%, a level that could cause shock waves in the financial markets” and “3% on the US Treasury yield is ‘just noise’ and does not matter, economist says.”
To sum up the situation: some investors fear that hitting 3.0%–something that hasn’t happened since 2014–means that higher rates are here to stay.
That turns into less spending money for companies and individuals, potentially causing a downturn for the U.S. economy.
The other side of the coin is that 3.0% is just a number and it’s not that much different from 2.98, 2.8, etc., and as such, shouldn’t cause any serious repercussions to the market.
Of course, no one knows for certain what will happen if and when the 10-year yield does hit 3.00%.
Often times, however, one finds that the truth of the matter is somewhere in between the two extremes.
Yes, we might see rates spike higher once the threshold is crossed as excited investors run around and rile each other up–but it’s just as likely, in my opinion, that the initial excitement fades quicker than expected and Treasury yields stabilize into a new status quo.
It’s important for anyone looking to buy a home or refinance their current mortgage to follow along with the market as these events unfold because the yield on the 10-year Treasury note is the main market indicator of where mortgage rates are going.
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Rate/Float Recommendation
Lock now to avoid risk
It currently seems that mortgage rates are going to continue to head higher in the coming days and weeks.
If you’re looking to purchase a new home or refinance your mortgage, the prudent decision is likely for you to lock in a rate sooner rather than later.
Learn what you can do to get the best interest rate possible.
Today’s economic data:
S&P Corelogic Case-Shiller HPI
The 20-city seasonally adjusted index rose 0.8% month over month in February. That’s one tenth above what analysts had expected.
The 20-city non-seasonally adjusted index ticked up 0.7% month over month, putting it at 6.9% year over year.
FHFA House Price Index
The FHFA house price index moved up 0.6% in February from the prior month, putting it at 7.2% year over year.
New Home Sales
New home sales for March came in at an annualized rate of 694,000.
Consumer Confidence
Consumer confidence is expected to come in between 123.1 and 129.0.
Richmond Fed Manufacturing Index
The consensus is for the index to hit between a 14 and 20.
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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/2qWVJB0
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