The week is winding down and mortgage rates are on track to finish out the week very close to where they started. Current mortgage rates are expected to continue moving higher over the coming weeks and months so if you’re thinking about taking action on a purchase or refinance, our recommendation is to lock a rate soon. Read on for more details.
Where are mortgage rates going?
Rates on track to finish out the week mostly flat
It’s been another up and down week for financial markets in the United States. The big event of the week–the FOMC minutes–didn’t fail to disappoint, signaling to investors that the Federal Reserve might be ready to hike the federal funds rate at a quicker than expected pace in 2018.
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How fast are we talking? You’ll get a different answer depending on who you talk to, but the general consensus is at least three, possibly four.
There are even some outliers now who are making the claim that there could be five increases this year. We’re talking about quarter point increases, so four rate hikes would bump the federal funds rate up from 1.25-1.50% to 2.25%-2.50%.
The next opportunity for the Fed to take action is in one month at their March meeting on the 21st. The fed is widely anticipated to follow through with their first quarter point increase of the year at that time.
For now, though, the speculation will continue about what happens after March. The greater the belief in a faster tightening schedule from the Fed, the more likely it is that mortgage rates will increase.
Already this year we’ve seen a huge jump in mortgage rates, with the average rate on a 30-year fixed rate mortgage up forty-five basis points to 4.40%, according to the latest numbers from the Freddie Mac Primary Mortgage Market Survey. That’s no small spike and the climb isn’t expected to end anytime soon.
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Rates Rise in Freddie Mac Primary Mortgage Market Survey
Here are the numbers:
- The average rate on a 30-year fixed rate mortgage moved up two basis points to 4.4% (0.5 points)
- The average rate on a 15-year fixed rate mortgage ticked up one basis point to 3.85% (0.5 points)
- The average rate on a 5/1-year adjustable rate mortgage rose two basis points to 3.65% (0.4 points)
Here is what the Freddie Mac’s Economic and Housing Research Group had to say about rates this week:
“Fixed mortgage rates increased for the seventh consecutive week, with the 30-year fixed mortgage rate reaching 4.40 percent in this week’s survey; the highest since April of 2014. Mortgage rates have followed U.S. Treasurys higher in anticipation of higher rates of inflation and further monetary tightening by the Federal Reserve. Following the close of our survey, the release of the FOMC minutes for February 21, 2018 sent the 10-year Treasury above 2.9 percent. If those increases stick, we will likely see mortgage rates continue to trend higher.”
It’s important to note that data for the PMMS is collected early on in the week and therefore doesn’t necessarily reflect current market conditions. Given that we’ve come back down off of the mid-week highs, the survey is fairly close to an accurate assessment of the present rate environment.
Rate/Float Recommendation
Lock in a rate soon
Mortgage rates are expected to continue rising throughout 2018, with many analysts calling for the 30-year fixed rate to hit 5% at some point.
Learn what you can do to get the best interest rate possible.
If you don’t want to risk getting a significantly higher rate, then you will want to lock in a rate on a purchase or refinance sooner rather than later.
Today’s economic data:
Fedspeak
- Boston Fed President Eric Rosengren at 10:15am
- New York Fed President William Dudley at 10:15am
- Cleveland Fed President Loretta Mester at 1:30pm
- San Francisco Fed President John Williams at 3:40pm
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Notable events this week:
Monday:
- Markets Closed: President’s Day
Tuesday:
- Nothing
Wednesday:
- Fedspeak
- PMI Composite Flash
- Existing Home Sales
- FOMC Minutes
Thursday:
- Jobless Claims
- Fedspeak
- EIA Petroleum Status Report
Friday:
- Fedspeak
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from Total Mortgage Blog http://ift.tt/2HCHh8F
via Naza Finance Blog
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