Mortgage rates are currently on track to finish out the week at higher levels than where they started. It was a steady stream of positive economic data that put upward pressure on the bond market and subsequently, mortgage rates.
Rates are expected to continue rising in 2018, so if you’re considering buying or refinancing, we recommend you take action soon. Read on for more details.
Where are mortgage rates going?
Rates finish higher on the week
It’s been a notable week for mortgage rates as we saw them climb to a seven-year high in the Freddie Mac Primary Mortgage Market Survey (PMMS). Here are the numbers from the report, released yesterday morning:
- The average rate on a 30-year fixed rate mortgage moved up six basis points to 4.61% (0.4 points)
- The average rate on a 15-year fixed rate mortgage rose seven basis points to 4.08% (0.4 points)
- The average rate on a 5/1-year adjustable rate mortgage ticked up five basis points to 3.82% (0.3 points)
Here is what Freddie Mac’s Economic and Housing Research Group said about the current rate environment:
“After plateauing in recent weeks, mortgage rates reversed course and reached a new high last seen eight years ago.
The 30-year fixed mortgage rate edged up to 4.61 percent, which matches the highest level since May 19, 2011.
Healthy consumer spending and higher commodity prices spooked the bond markets and led to higher mortgage rates over the past week. Not only are buyers facing higher borrowing costs, gas prices are currently at four-year highs just as we enter the important peak home sales season.
While this year’s higher mortgage rates have not caused much of a ripple in the strong demand levels for buying a home seen in most markets, inflationary pressures and the prospect of rates approaching 5 percent could begin to hit the psyche of some prospective buyers.”
The big focus for financial market participants this week was the rising 10-year Treasury yield. It started the week at about 2.96% but has since risen nearly thirteen basis points up to 3.08%.
There was some positive economic data early on in the week that kicked off the ascent, which steadily gained traction as more data came out.
Mortgage rates typically move in the same direction as the 10-year yield so it was really no surprise that rates jumped as much as they did in this week’s PMMS.
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Rate/Float Recommendation
Lock before rates move even higher
With mortgage rates moving up to levels not seen since 2011, it’s only natural to be somewhat hesitant about locking in a rate.
However, if you take into consideration that the Fed is getting ready to increase the federal funds rate two to three more times in 2018, it stands to reason that rates right now could be much lower than where they will be by the time 2019 rolls around.
That’s why we’re recommending that anyone who wants to avoid the risk of a higher rate takes action on a purchase or refinance sooner rather than later.
Learn what you can do to get the best interest rate possible.
Today’s economic data:
Fedspeak
- Cleveland Fed President Loretta Mester at 3:00am
- Dallas Fed President Robert Kaplan at 9:15am
- Fed Governor Lael Brainard at 9:15am
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Notable events this week:
Monday:
- Fedspeak
Tuesday:
- Retail Sales
- Empire State Mfg Survey
- Business Inventories
- Housing Market Index
Wednesday:
- Housing Starts
- Fedspeak
- Industrial Production
- Atlanta Fed Business Inflation Expectations
- EIA Petroleum Status Report
Thursday:
- Jobless Claims
- Philadelphia Fed Business Outlook Survey
- Bloomberg Consumer Comfort Index
- Fedspeak
Friday:
- Fedspeak
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from Total Mortgage Blog https://ift.tt/2wPk41P
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