Current mortgage rates are moving slightly higher this week. However, the biggest economic event of the week–the monthly jobs report for July–will get released tomorrow morning, so we could certainly see mortgage rates adjust when that gets released. Read on for more details.
Where are mortgage rates going?
All eyes on jobs report tomorrow
It’s been a busy week so far. Yesterday, the Federal Open Market Committee (FOMC) met to discuss the direction of the nation’s economic policy. As expected, they decided to keep the nation’s benchmark interest rate–the federal funds rate–unchanged at 1.75%-2.00%.
Notably, they did mention that the U.S. economy has been “rising at a strong rate.” That’s a slightly more hawkish stance than the one they took in June, leading financial market participants to speculate that they will be following through with a quarter-point rate increase in September.
This has caused more money to flow out of bonds and into riskier assets like stocks, pushing long-term Treasury yields higher. The yield on the 10-year Treasury note, which is the best market indicator of where mortgage rates are going, is up to 2.98% right now.
That’s a few basis points higher from where it was at the start of the week. Mortgage rates typically move in the same direction as the 10-year yield, so rate have also increased since Monday.
That brings us to the Freddie Mac Primary Mortgage Market Survey (PMMS). Rates increased again this week, hitting a seven-year high. Here are the numbers:
- The average rate on a 30-year fixed rate mortgage jumped six basis points to 4.6% (0.4 points)
- The average rate on a 15-year fixed rate mortgage increased six basis points to 4.08% (0.4 points)
- The average rate on a 5-year adjustable rate mortgage rose six basis points to 3.93% (0.2 points)
Here is what the Economic and Housing Research Group at Freddie Mac had to say about rates this week:
“The 30-year fixed-rate mortgage drifted up for the second consecutive week to 4.60 percent.
The higher rate environment, coupled with the ongoing lack of affordable inventory, has led to a drag on existing-home sales in the last few months. Yesterday, the Federal Reserve passed on raising short-term rates, but with the embers of a strong economy potentially stoking higher inflation, borrowing costs will likely modestly rise in coming months.
Even with home price growth easing slightly in some markets, mortgage rates hovering near a seven-year high will certainly create affordability challenges for some prospective buyers looking to close.”
Lock now before move even higher
Current mortgage rates ticked up to a seven-month high this week. Naturally, that doesn’t sound like great news for anyone looking to purchase or refinance. It is a reality, though, so anyone right now needs to think about how they can best position themselves in today’s environment.
Looking at the silver lining, mortgage rates are expected to continue rising over the coming weeks and months, so if you take action soon and lock in a rate, you’ll be much better off than those who choose to wait. All it takes is a few minutes online or a quick phone call with one of our mortgage experts to get you started.
Today’s economic data:
Applications filed for U.S. unemployment benefits came in at 218,000 for the week of 7/28/18. That brings the four-week moving average to 214,500.
Notable events this week:
- Pending Home Sales Index
- Dallas Fed Mfg Survey
- FOMC Meeting Begins
- Personal Income and Outlays
- Employment Cost Index
- S&P Corelogic Case-Shiller HPI
- Chicago PMI
- Consumer Confidence
- ADP Employment Report
- PMI Manufacturing Index
- ISM Mfg Index
- Construction Spending
- EIA Petroleum Status Report
- FOMC Meeting Ends
- Jobless Claims
- Employment Situation
- International Trade
- PMI Services Index
- ISM Non-Mfg Index