It’s good news for anyone looking to purchase a new home or refinance their current mortgage today as rates are improving. It was some comments from President Trump on China and North Korea that sent investors into a more risk-off scenario, pushing Treasury yields and mortgage rates lower. Read on for more details.
Market Outlook 5.21.18 from Total Mortgage on Vimeo.
Where are mortgage rates going?
Rates move lower
It’s been a while since President Trump has been one of the main factors in where the market moves on a daily basis but that’s where we are today. First the President commented that he was not pleased with the way the trade talk between the U.S. and China has been unfolding.
He said that they have “a long way to go.” Then, more geo-politcal tensions were fanned when the President said that the summit between him and North Korea’s Kim Jong Un might not go ahead as planned.
These comments have caused the markets to adopt a more risk-off sentiment, sending investors into the safe-haven of long-term government bonds.
If we take a look at the yield on the 10-year Treasury note, which is the best market indicator of where mortgage rates are going, we can see that’s its down a little over five basis points today to 3.01%.
Mortgage rates typically move in the same direction as the 10-year yield, so rates are headed a little lower as we approach the midpoint of the week.
With geo-political concerns back in the spotlight, it’s important for potential home buyers to pay attention to the news and check in to see how the market is reacting.
Of course, we do have some significant economic reports out on Friday (Durable Goods Orders and Consumer Sentiment), and could definitely see a market reaction when those are released as well.
The takeaway here is that mortgage rates are incredibly fickle and can be influenced by a multitude of factors. That’s what makes it so difficult to predict where they will be at any given point of time.
What we can say right now, though, is that with the Federal Reserve on track to raise the nation’s benchmark interest rate at least two more times this year, it stands to reason that mortgage rates will continue to move higher and higher over the coming weeks and months.
How high will they go? Well, the average rate on the 30-year fixed rate mortgage (according to the most recent Freddie Mac Primary Mortgage Market Survey) is at 4.61%.
That’s up sixty-six basis points from the start of the year. If the Fed continues on the path that they’ve currently outlined, it’s not unfathomable to think that we’ll see the 30-year push above 5.00% in 2018.
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Rate/Float Recommendation
Lock before rates move even higher
With a higher rate adjustment looming, we’ve been recommending that borrowers take action sooner rather than later in order to avoid the risk of locking in a higher rate.
There are always unique factors in each borrower’s scenario, but in general, we believe that those who are quick to act will be better off doing so. The best way to figure out your ideal course of action is to go over your situation with an experience mortgage expert.
Our mortgage bankers have seen countless scenarios and can quickly and easily identify what you need to do to best position yourself in the current market. It only takes a quick phone call or a few minutes with our online form to get started.
Learn what you can do to get the best interest rate possible.
Today’s economic data:
PMI Composite Flash
We got some strong readings in the PMI Composite Flash today. The composite, manufacturing, and services readings all came in above what analysts had predicted.
New Home Sales
New Home Sales for April came in at an annualized rate of 662,000. That’s 10,000 below what analysts had expected.
EIA Petroleum Status Report
For the week of 5/18/18:
- Crude oil: 5.8 M barrels
- Gasoline: 1.9 M barrels
- Distillates: -1.0 M barrels
FOMC Minutes
The minutes from the Federal Open Market Committee’s previous meeting will be released this afternoon at 2:00pm.
Fedspeak
Minneapolis Fed President Neel Kashkari at 2:15pm.
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Notable events this week:
Monday:
- Chicago Fed National Activity Index
- Fedspeak
Tuesday:
- Richmond Fed Manufacturing Index
Wednesday:
- PMI Composite Flash
- New Home Sales
- EIA Petroleum Status Report
- FOMC Minutes
- Fedspeak
Thursday:
- Jobless Claims
- FHFA House Price Index
- Existing Home Sales
- Kansas City Fed Manufacturing Index
- Fedspeak
Friday:
- Durable Goods Orders
- Consumer Sentiment
- Fedspeak
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from Total Mortgage Blog https://ift.tt/2GKQH0b
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