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?
Freddie Mac has rates lower
It’s Thursday morning after 10am, and that means that we have the pleasure of viewing this week’s Freddie Mac Private Mortgage Market Survey (PMMS). After a less than stellar August jobs report last Friday, investors moved back into stocks this week causing mortgage rates to move slightly lower.
The average rate on a 30-year fixed rate mortgage fell 2 points to 3.44% (0.6 points); the average rate on a 15-year fixed rate mortgage went down 1 point to 2.76% (0.5 points); and the average rate on a 5-year ARM dropped 2 basis points to 2.81% (0.4 points).
This is now the 11th consecutive week where the 30-year fixed rate average has remained in the 3.41%-3.48% range.
It’s always worth noting that data for the survey gets collected early on in the week, so the report does not necessarily reflect current market conditions. That being said, the yield on the 10-year U.S. treasury note is actually trading lower than where it was on Monday and most of Tuesday, so it’s possible that rates are a touch lower than where the PMMS has them.
Fed Fund Futures doubt September
The Fed Fund futures took a hit on Tuesday after the ISM index posted its worst reading since 2010. Anyone who had their hopes up for a September rate hike must now deal with the near certainty that that event will not come to pass. I was never in that camp, and am therefore, left with nothing to grieve. Of course, anyone who wants to look at it in a positive light, could say that the glass isn’t 85% empty for September, it’s 15% full. That optimism might make you feel good, but I don’t think it will give you a rate hike on the 21st. November doesn’t get much better with a 21% chance. I’ve been saying it for months, amid all of the rate hike hoopla: December is the only real contender for a rate hike. That doesn’t mean it’s a sure thing, though. Right now, it has a little over a 50% chance.
What does this mean for me?
Low rates favor borrowers
The low rate environment lives to see another day. The average rate on a 30-year fixed is just 13 basis points above all-time lows. As chief economist at Freddie Mac Sean Becketti said today, “Many are taking advantage of the historically low rates by refinancing.” If you’ve been thinking about locking in a low rate, you’re not the only one. It seems like low rates aren’t going anywhere anytime soon, but it’s still the smart play to act now while you have the sure thing.
Today’s economic data:
Jobless claims fell 4,000 to 259,000 for the week of 9/3. That puts the 4-week moving average at 261,125. The labor market has been producing healthy numbers throughout 2016, and that trend continues with this report. This data is pushing long-term government bonds and mortgage rates up this morning, but only by a couple points. That’s not enough to rebound back to where it was before the terrible ISM index report on Tuesday.
EIA Petroleum Status Report
For the week of 9/2:
- Crude oil +2.3 M barrels
- Gasoline -0.7 M barrels
- Distillates +1.5 M barrels
Notable events this week:
- Labor Day
- ISM Non-Mfg Index
- Beige Book
- Jobless Claims
- EIA Petroleum Status Report
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