Mortgage Rates Still Moving Higher

Economic reports, indicators, and data are again very unstable today as investors have become leery of all the activity that has occurred.  Usually one would see that rates would fall, but they have continued to rise this week.  Yesterday’s strong Consumer Price Index reading signaled to investors that the Fed might be destined for a faster rate hike schedule than previously thought, which has put upward pressure on mortgage rates. Even with rates mostly flat this morning after the data was released, we believe borrowers should try to lock in a rate soon.

Where Are Mortgage Rates Going?                     

>>> Rates are still moving higher

Every Thursday we get the Freddie Mac Primary Mortgage Market Survey, and it shows that rates are rising which is not catching anyone by surprise.  Why do I mention this?  Because this data seems to be outdated, as the numbers that were reported would be very attractive today, but they have risen even more to another new high in 2018.

Here’s what the Freddie Mac Economic & Housing Research group had to say about mortgage rates this week:

“Wednesday’s Consumer Price Index report showed higher-than-expected inflation; headline consumer price inflation was 2.1 percent year-over-year in January two tenths of a percentage point higher than the consensus forecast. Inflation measures were broad-based, cementing expectations that the Federal Reserve will go forward with monetary tightening later this year. Following this news, the 10-year Treasury reached its highest level since January 2014, climbing above 2.90 percent. Mortgage rates have also surged. After jumping 10 basis points last week, the 30-year fixed-rate mortgage rose 6 basis points to 4.38 percent, its highest level since April 2014.”

That mortgage rates increased after the strong CPI reading, and I had discussed this earlier this week in my reports that we needed to take caution. This is now the sixth straight week that mortgage rates have moved higher in the PMMS, with the 30-year fixed rate up thirty-nine basis points (one basis point = 0.01) from the start of the year.

Currently we are seeing rates at four-year highs right now. It is true that every borrower has their own set of unique circumstances that will affect what rate they get, but the average is clearly up a significant amount from the start of the year.

Rate/Float Recommendation           

>>> Lock in your rate now unless you have a crystal ball

With mortgage rates continuing to move higher, we believe that the smart decision for anyone looking to purchase a new home or refinance their current mortgage is to lock in a rate sooner rather than later. In a span of six weeks, we’ve seen the average rate on a 30-year in the PMMS move up thirty-nine basis points. That is certainly not an insignificant amount, and when you consider that many analysts are calling for the 30-year to hit 5% by the time 2019 rolls around, current mortgage rates look very appealing.