The inflation readings this week came in soft, helping to keep mortgage rates on the lower side. We still have some key economic reports out on Friday that could impact that direction of rates. Long-term, the expectation is still for rates to move higher so borrowers will likely want to lock in a rate soon. Read on for more details.
Where are mortgage rates going?
Inflation data comes in soft – keeps rates from rising
At the start of the week we knew we were going to be dealing with several important inflation reports that could impact the direction of the markets.
Last Friday we got a softer than expected average hourly earnings reading in the monthly jobs report for February, so investors were eager to find out if that was a one-off instance or reflective of a broader trend.
After this mornings weaker than expected Retail Sales and Producer Prices reports, it’s clear that inflation had a slow month in February.
Inflation talk has been center stage the past few months after we got some standout readings in several reports, but the situation has now tempered, leading financial market participants to believe that the Federal Reserve will not be raising the federal funds rate as aggressively in 2018 as some had been starting to claim.
This has caused investor appetite for bonds to increase somewhat, pushing down yields. The yield on the 10-year Treasury note, which is the best market indicator of where mortgage rates are going, is down to 2.83% today.
That’s about seven basis points below the week’s high of 2.90%. Mortgage rates typically move in the same direction as the 10-year yield, so rates have improved over the last twenty-four hours.
Lock now to try and get the best deal
Mortgage rates have slowed their climb over the last couple of weeks, which is good news for anyone looking to purchase or refinance.
However, the consensus among market analysts is that they will continue to climb throughout 2018, so if you’re thinking about locking in a rate sometime in the near-future, you’re best bet is likely to do it sooner rather than later.
It only takes a couple minutes online or a quick phone call to one of our loan officers to get started.
Today’s economic data:
Producer Prices ticked up 0.2% in February, putting them at 2.8%, year over year. PPI-FD less food and energy also rose 0.2% in February, bringing it to 2.5%, year over year. PPI-FD less food, energy and trade services jumped up 0.4% in February, putting it at 2.7%, year over year.
Retail sales unexpectedly fell 0.1% in February. Retail sales less autos rose 0.2%. Retail sales less autos and gas rose 0.3%.
Inventories ticked up 0.6% in January. That’s slightly higher than the 0.5% that was expected.
EIA Petroleum Status Report
For the week of 3/9/18:
- Crude oil: 5.0 M barrels
- Gasoline: -6.3 M barrels
- Distillates: -4.4 M barrels
Notable events this week:
- 10-Yr Note Auction
- NFIB Small Business Optimism Index
- Consumer Price Index
- Retail Sales
- Business Inventories
- EIA Petroleum Status Report
- Jobless Claims
- Philadelphia Fed
- Empire State Mfg Survey
- Import and Export Prices
- Housing Market Index
- Housing Starts
- Industrial Production
- Consumer Sentiment
Filed Under: Current Mortgage Rates, Mortgage Interest Rates, Mortgage Rate Trends and Analysis, Mortgage Rates, Rates
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