It’s been an up and down ride for mortgage rates over the past twenty-four hours. The FOMC minutes yesterday created some market jitters that moved rates higher, but then today we saw a reversal with rates moving back down toward levels that we saw at the start of the week. Read on for more details.
Where are mortgage rates going?
Rates move up after Fed minutes – back lower today
Yesterday we got the minutes from the Federal Open Market Committee’s meeting a few weeks ago.
Financial market participants across the nation were tuned in to see if there were any hints about the rate hike path in 2018, and to some extent, they weren’t disappointed.
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Optimism about the U.S. economy rang loud and clear through the minutes, with FOMC members revising their economic projections higher from the previous meeting in December.
The FOMC’s next meeting is about a month away in March, and the general consensus from investors has been that there will be a quarter point increase to federal funds rate at that time. Now, after the release of yesterday’s minutes, that decision is further bolstered.
We still have a decent amount of economic data that will come out between now and then, including the monthly jobs report for February and several inflation readings, but it’s hard to imagine a scenario where the numbers come in low enough to sabotage a March rate hike.
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As one would expect, the market reacted swiftly to the FOMC minutes, with the yield on the 10-year Treasury note (the best market indicator of where mortgage rates are going) moving up to a multi-year high of 2.95% in afternoon trading.
Today, though, we’ve seen the markets settle down a little, with the 10-year yield moving back down to around 2.90%. That’s slightly above where it started the week. Mortgage rates typically move in the same direction as the 10-year yield.
Rates Rise in Freddie Mac Primary Mortgage Market Survey
We got the latest Freddie Mac PMMS out today and it showed (surprise, surprise) that mortgage rates moved higher this week. Here are the numbers:
- The average rate on a 30-year fixed rate mortgage moved up two basis points to 4.4% (0.5 points)
- The average rate on a 15-year fixed rate mortgage ticked up one basis point to 3.85% (0.5 points)
- The average rate on a 5/1-year adjustable rate mortgage rose two basis points to 3.65% (0.4 points)
Here is what the Freddie Mac’s Economic and Housing Research Group had to say about rates this week:
“Fixed mortgage rates increased for the seventh consecutive week, with the 30-year fixed mortgage rate reaching 4.40 percent in this week’s survey; the highest since April of 2014. Mortgage rates have followed U.S. Treasurys higher in anticipation of higher rates of inflation and further monetary tightening by the Federal Reserve. Following the close of our survey, the release of the FOMC minutes for February 21, 2018 sent the 10-year Treasury above 2.9 percent. If those increases stick, we will likely see mortgage rates continue to trend higher.”
Rate/Float Recommendation
Lock in a rate soon
Mortgage rates have now moved higher for seven straight weeks. Since the start of the year the average rate on a 30-year fixed rate mortgage has increased by forty-five basis points.
Learn what you can do to get the best interest rate possible.
With mortgage rates expected to continue rising throughout 2018, we believe that it makes sense for most borrowers to lock in a rate on a purchase or refinance, sooner rather than later.
Today’s economic data:
Jobless Claims
Applications filed for U.S. unemployment benefits came in at 222,000 for the week of 2/17/18. That puts the 4-week moving average at 226,000.
Fedspeak
- Fed Governor Randal Quarles at 12:15am
- New York Fed President William Dudley at 10:00am
- Atlanta Fed President Raphael Bostic at 12:10pm
- Dallas Fed President Robert Kaplan at 3:30pm
EIA Petroleum Status Report
- 11:00am
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Notable events this week:
Monday:
- Markets Closed: President’s Day
Tuesday:
- Nothing
Wednesday:
- Fedspeak
- PMI Composite Flash
- Existing Home Sales
- FOMC Minutes
Thursday:
- Jobless Claims
- Fedspeak
- EIA Petroleum Status Report
Friday:
- Fedspeak
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from Total Mortgage Blog http://ift.tt/2EW9vwG
via Zero Mortgage Insurance
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