Happy Friday, and welcome to the TMS current mortgage rates blog. There’s some economic data out today, but first, your daily mortgage rate forecast/advice.
Where are mortgage rates going?
U.S stock prices faced pressure from a rising dollar yesterday. That trend is continuing this morning, with the dollar now moving up to an 8-month high. The European Central Bank’s decision to keep key interest rates unchanged played into what we’re currently seeing, but it was ECB president Mario Draghi’s comments that there had been “no discussion” about extending our tapering QE that really sent stock swirling. That discussion seems destined for 2017.
Checking in with the Fed Fund futures, we can see that things haven’t changed much. For anyone who’s curious about November’s chances of a rate hike, it’s 9.3%. Not very good at all. December’s odds aren’t anything you’d want to bet the house on either, sitting at almost 70%. It’s true that those are the best odds we’ve seen in quite some time, but it’s definitely not a lock.
This week we saw a mix of weak and strong economic data, which shows that we’re still not firing on all cylinders. Notably, we have two jobs reports before that meeting. I would agree with the Fed Fund futures that a December rate hike is more likely than not, but I’m wary of a fickle Fed that has shown little hesitation to hold off when the wind blows the wrong way.
Yesterday we also got the Freddie Mac Primary Mortgage Market Survey (PMMS), which revealed that mortgage rates moved higher this week. The average rate on a 30-year fixed rate mortgage rose five basis points (one basis point = o.01) to 3.52% (0.5 points); the average rate on a 15-year fixed rate mortgage went up three basis points to 2.79% (0.5 points); and the average rate on a 5-year ARM went up three basis points to 2.85% (0.5 points).
Here is what Sean Becketti, Chief Economist at Freddie Mac, had to say about mortgage rates this week:
“The 30-year fixed-rate mortgage moved a solid 5 basis points to 3.52 percent while the 10-year Treasury yield remained relatively flat. This is the first week in over 4 months that rates have risen above 3.50 percent. This month, mortgage rates seem to be catching up to Treasury yields and returning to pre-Brexit levels.”
What does this mean for me?
Mortgage rates did rise this week, but they’re still at very low levels historically. Last year at this time, rates were around 3.82%. That’s 30 basis points above where we are right now. When everyone is talking about rising rates, it’s important to put things in perspective. We’re much closer to all-time lows than all-time highs; nevertheless, if you’re thinking about purchasing a home or refinancing your current mortgage, I recommend you act sooner rather than later, as rates are likely to continue to trend higher.
Today’s economic data:
- Fed Governor Daniell Tarullo will give a speech at 10:15am.
- San Francisco Fed President John Williams will talk at 2:30pm.
Notable events this week:
- Empire State Mfg
- Industrial Production
- Consumer Price Index
- Housing Starts
- EIA Petroleum Status Report
- Jobless Claims
- Philadelphia Fed Business Outlook Survey
- Existing Home Sales
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