Mortgage rates continue to tick higher in 2018. Fed Chair Jerome Powell is back on Capitol Hill today, so there’s the potential for him to make some comments that impact the direction of current mortgage rates today. Long-term, rates are expected to continue to move higher. Read on for more details.
Where are mortgage rates going?
Rates up again in Freddie Mac PMMS
Every Thursday at 10:00am the Freddie Mac Primary Mortgage Market Survey (PMMS) gets released, revealing where mortgage rates are at for borrowers in the U.S. For the past two months now, we’ve seen mortgage rates steadily climb higher. Here are the numbers from today’s survey:
- The average rate on a 30-year fixed rate mortgage moved up three basis points to 4.43% (0.5 points)
- The average rate on a 15-year fixed rate mortgage went up five basis points to 3.90% (0.5 points)
- The average rate on a 5-year adjustable rate mortgage fell three basis points to 3.62% (0.4 points)
This is what the Freddie Mac Economic & Housing Research Group had to say about mortgage rates this week:
“An optimistic testimony on Capitol Hill from Federal Reserve Chairman Jerome Powell sent Treasury yields higher as Powell stated his outlook for the economy has strengthened since December. Following Treasurys, the 30-year fixed mortgage rate jumped 3 basis points to reach 4.43 percent. The benchmark 30-year rate has been on a tear in 2018, climbing 48 basis points since the start of the year and increasing for 8 consecutive weeks. The 30-year fixed mortgage rate averaged 4.33 percent in February, up 30 basis points from last month and the highest monthly average since April of 2014.
As we documented, historically when mortgage rates surge, housing swoons. But we think strength in the economy and pent up housing demand should allow U.S. housing markets to post modest growth this year even with higher mortgage rates. We really have to wait for housing markets to heat up in spring, but early indications are that housing demand remains robust to these rate increases. The MBA reported in their latest weekly applications survey that home purchase mortgage originations were up 3 percent from a year ago.”
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Rate/Float Recommendation
Lock in a rate soon before they rise significantly
Mortgage rates have moved higher for two months. The average rate on a 30-year fixed has shot up forty-eight basis points since the first survey in January. Looking ahead to the rest of the year, the general consensus is that mortgage rates will continue to rise, potentially reaching past 5%.
Learn what you can do to get the best interest rate possible.
Given this expectation, it stands to reason that borrowers who take action on a purchase or refinance soon will likely get the better deal. The longer you wait, the more risk there is for a higher mortgage rate.
Today’s economic data:
Jobless Claims
- Applications for U.S. unemployment benefits came in at 210,000 for the week of 2/24/18. That puts the four-week moving average at 220,500.
Personal Income and Outlays
- The personal income and outlays report for January got released this morning showing the personal income rose 0.4% from the prior month. Consumer spending rose 0.2%. The PCE Price Index ticked up 0.4%, putting it at 1.7% year over year. Core PCE rose 0.3%, month over month, bringing it to 1.5% year over year.
PMI Manufacturing Index
- The PMI Mfg Index hit a 55.3 for February. That’s slightly below the consensus for 55.7.
ISM Mfg Index
- The ISM Mfg Index came in at 60.8 for February. That’s higher than both the consensus and prior reading.
Construction Spending
- Construction spending was unchanged in January, putting it at 3.2% year over year.
Fedspeak
- New York Fed President William Dudley will speak at 11:00am.
Jerome Powell Testimony
- Fed Chair Jerome Powell will go before the Senate Banking Committee today.
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Notable events this week:
Monday:
- Fedspeak
- Chicago Fed National Activity Index
- New Home Sales
- Dallas Fed Mfg Survey
Tuesday:
- Durable Goods Orders
- International Trade in Goods
- Jerome Powell Testimony
- FHFA House Price Index
- Consumer Confidence
- Richmond Fed Manufacturing Index
Wednesday:
- GDP
- Chicago PMI
- Pending Home Sales Index
- EIA Petroleum Status Report
Thursday:
- Jobless Claims
- Personal Income and Outlays
- PMI Manufacturing Index
- ISM Mfg Index
- Construction Spending
- Fedspeak
- Jerome Powell Testimony
Friday:
- Consumer Sentiment
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from Total Mortgage Blog http://ift.tt/2t6S08m
via Naza Finance Blog
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