Mortgage rates are continuing to move higher this week. We’ve now seen them rise for two consecutive weeks in the Freddie Mac PMMS. The consensus is for them to continue rising for the foreseeable future. Read on for more details.
Where are mortgage rates going?
Mortgage rates rise in the Freddie Mac PMMS again
Mortgage rates have moved higher for the second straight week according to the Freddie Mac Primary Mortgage Market Survey (PMMS). Here are the numbers:
- The average rate on the 30-year fixed rate mortgage moved two basis points higher to 4.54% (0.5 points)
- The average rate on a 15-year fixed rate mortgage ticked up two basis points to 3.99% (0.4 points)
- The average rate on a 5-year adjustable rate mortgage moved up eight basis points to 3.93% (0.3 points)
Here is what Freddie Mac’s Economic and Housing Research Group had to say about mortgage rates this week:
“The 30-year fixed-rate mortgage inched higher for the second straight week.
Borrowing costs may be slowly on the rise again in coming weeks, as investors remain optimistic about the underlying strength of the economy. It’s important to note that mortgage rates are now up three-quarters of a percentage point from last year and home prices – albeit at a slower pace – are still outrunning rising inflation and incomes.
This weakening in affordability is hindering many interested buyers this fall, even as the robust economy brings them into the market. The good news is that purchase mortgage applications have recently rebounded to above year ago levels.”
Lock now before rates move even higher
Mortgage rates have risen these past few weeks and that trend is expected to continue over the coming months as the Federal Reserve gets ready to, and does, increase the nation’s benchmark interest rate.
If you are planning to buy a home or refinance your current mortgage, we strongly recommend that you lock in a rate sooner rather than later. The longer you wait, the more likely it is that you’ll get a higher rate.
Today’s economic data:
ADP Employment Report
The ADP employment report showed 163,000 jobs added to the U.S. economy in August.
Applications filed for unemployment benefits in the U.S. came in at 203,000 for the week of 9/1/18. That’s 10,000 fewer than the previous week, bringing the four-week moving average to 209,500.
Productivity and Costs
Nonfarm productivity rose 2.9% Q/Q in the second quarter of 2018. Unit labor costs fell 0.1%.
PMI Services Index
The PMI Services Index came in at 54.8 for August.
San Francisco Fed President John Williams is set to speak at 10:00am.
Factory orders fell 0.8% month over month in July.
ISM Non-Mfg Index
The ISM Non-Mfg index hit a 58.5 in August, up a little from July.
EIA Petroleum Status Report
For the week of 8/31:
- Crude oil: -4.3 M barrels
- Gasoline: 1.8 M barrels
- Distillates: 3.1 M barrels
Notable events this week:
- Markets Closed
- PMI Manufacturing Index
- ISM Mfg Index
- Construction Spending
- ADP Employment Report
- Jobless Claims
- Productivity and Costs
- PMI Services Index
- Factory Orders
- ISM Non-Mfg Index
- EIA Petroleum Status Report
- Employment Situation