Mortgage rates are staying flat again today. They’ve stayed in a tight range all week and could remain there as we head into the weekend. It all depends on the monthly jobs report on Friday, though. We could just as easily see that report show some strong numbers and push mortgage rates higher. Read on for more details.
Where are mortgage rates going?
Rates rise after moving lower yesterday
The day is young and already we’ve seen bond yields bounce around several times. At first, we got news out of China about new tariffs against the U.S. This sparked buying in the bond market, pushing up yields.
Then, a very first jobs reading number in the ADP employment situation, which showed 241,000 jobs added in March had the opposite effect, sending yields back up. The ADP report is kind of like the appetizer for Friday’s monthly jobs report from the Labor Department.
But now, bond yields are moving lower once again. Not by much, but they are still down on the day. The yield on the 10-year Treasury note, which is the best market indicator of where mortgage rates are going, is down a little over one basis point.
That’s fairly negligible. Mortgage rates typically move in the same direction as the 10-year yield and are similarly not seeing much movement today. So far this week, rates have stayed in a contained range.
That could change, however, as we make our way to the monthly jobs report on Friday. That report is always one of the biggest market moving events of the month and this time around shouldn’t be any different.
We’ve got a lot of talk and speculation over the past several weeks and months about inflation data and what it all means for the Federal Reserve and their plan to raise the federal funds rate.
At their meeting a few weeks ago, they came out and said that a total of three rate hikes would take place in 2018. As we know with the Fed, their outlook is hardly set in stone.
Depending on what the data says we could always see an adjustment to their policy. With the monthly jobs report, investors will be looking closely at the headline reading, but more importantly, the average hourly earnings reading, to see if there are signs of an uptick in inflation.
If we get a strong headline reading and better than expected growth in wages, we will likely see investors move more into stocks and out of bonds, pushing up the Treasury yields and mortgage rates.
So if you don’t want to deal with the threat of rising rates on Friday, you’re going to want to lock in a rate right now. Mortgage rates seem as though they will remain flat on the week until Friday, so there is definitely a window of opportunity for borrowers to take advantage of.
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Rate/Float Recommendation
Lock now before rates move higher
Mortgage rates are staying in a tight range. This is good news for anyone who is trying to lock in a rate on a purchase or refinance. There is a clear risk though this week with the monthly jobs report on Friday. If you want to avoid the potential for rising rates, we recommend that you lock now.
Even if you wait it out this week, the long-term trend is for rates to move higher, so we still think that taking action sooner rather than later is a smart move.
Learn what you can do to get the best interest rate possible.
Today’s economic data:
ADP Employment Report
The ADP employment report is showing 241,000 jobs were added to the U.S. economy in March. That’s a very solid number that is much higher than the 185,000 that analysts had expected.
Fedspeak
- St. Louis Fed President James Bullard at 9:45am
- Cleveland Fed President Loretta Mester at 11:00am
PMI Services Index
The PMI services index hit a 54.0 in March.
Factory Orders
Factory orders moved up 1.2% in February.
FOMC Minutes
- 2:00pm
ISM Non-Mfg Index
The composite index hit a 58.8 in March.
EIA Petroleum Status Report
For the week of 4/4/18:
- Crude oil: -4.6 M barrels
- Gasoline: -1.1 M barrels
- Distillates: 0.5 M barrels
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Notable events this week:
Monday:
- PMI Manufacturing Index
- ISM Manufacturing Index
- Construction Spending
- Fedspeak
Tuesday:
- Fedspeak
Wednesday:
- ADP Employment Report
- Fedspeak
- PMI Services Index
- Factory Orders
- FOMC Minutes
- ISM Non-Mfg Index
- EIA Petroleum Status Report
Thursday:
- Jobless Claims
- International Trade
- Fedspeak
Friday:
- Monthly Jobs Report
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via Zero Mortgage Insurance
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