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?
Heading into the holiday weekend, U.S. markets are still grappling with life after the Brexit. It doesn’t help that none of the economic data out this week was particularly robust. Fortunately, mortgage rates are benefiting from the bad news.
Freddie Mac PMMS shows new 3-year lows
We got our first post-Brexit Freddie Mac Primary Mortgage Market Survey (PMMS) yesterday. Unsurprisingly, it revealed that mortgage rates took a bit of a dive and are now at new lows. The average rate on a 30-year fixed rate mortgage fell to 3.48% (0.5 points); the average rate on a 15-year fixed rate went to 2.78% (0.4 points); and the average rate on a 5-year ARM sunk down to 2.70% (0.5 points). The last time mortgage rates were this low was May 2013, and perhaps what is most impressive is that the 30-year fixed is a mere 17 basis points above the all-time low of 3.31%.
Where rates go from here is anyone’s guess. The big market mover of the month comes next week with the June employment report. I imagine that Fed officials are desperately hoping for a strong number. If anything could boost the markets, it’s that report. On the converse, a poor report would certainly send markets reeling.
10-year yield hits all-time lows
The yield on the U.S. 10-year Treasury note is still showing no indication of climbing out from its post-Brexit hole. In fact, it seems to be bent on burrowing deeper into the abyss. The yield is currently trading at 1.46%, but it briefly dipped down to an all-time low this morning when it touched 1.378%. The previously low of 1.39% was set back in September 2012. Mortgage rates have a strong tendency to follow in the footsteps of the 10-year yield, so all of this is good news for prospective homebuyers or homeowners looking to refinance into a lower rate.
Fed Fund futures still don’t know where a rate hike is
Everyone’s favorite fed watching tool–the Fed Fund futures–is still showing a very little chance of a rate hike in 2016. It’s been that way all week, and I expect it to stay like that for quite some time. That means July, September, and November are all but guaranteed to not see a rate hike. They actually have an oh-so-small chance of a drop in rates. I don’t expect that to happen, but it’s there.
Then we come to December. In the pre-Brexit world, December was seen as a near lock for a rate hike. It was the light at the end of the monetary policy tunnel. Now, it sits there with a measly 14.1% chance of a rate hike. It’s definitely possible that as we move forward these next few weeks and months that number will start to change, but for now, a rate hike in 2016 seems to be a highly unlikely event.
What does this mean for me?
Mortgage rates are at new 3.5-year lows. That’s great news for anyone looking to refinance or purchase a home. There’re plenty of opportunities to lock in a low rate, I would just recommend that you do it sooner rather than later, as there’s no telling when rates jump back up.
Today’s economic data:
PMI Manufacturing Index
The June PMI manufacturing index came in at 51.3, slightly up from May’s 50.7.
ISM Manufacturing Index
The ISM manufacturing index also posted a moderate gain in June with a reading of 53.2, up from 51.3. New orders and export orders are both up.
Construction spending wound up in the negative for May, coming in at -0.8%.
Notable events this week:
- International Trade in Goods
- Dallas Fed Manufacturing Survey
- S&P/Case-Shiller Home Price Index
- Consumer Confidence
- Personal Income and Outlays
- Janet Yellen speaks
- Pending Home Sales Index
- EIA Petroleum Status Report
- Weekly Initial Jobless Claims
- Chicago PMI
- PMI Manufacturing Index
- ISM Manufacturing Index
- Construction Spending
Filed Under: Mortgage Interest Rates, Mortgage Rate Trends and Analysis, Mortgage Rates, Rates
Tagged with: Current Mortgage Rates, daily mortgage rates, Mortgage Rates, mortgage rates today, todays mortgage rates