Mortgages Rates Hits a Downward Trend

Mortgage rates today opened down slightly, probably due to late bond price increases yesterday afternoon. However, the National Association of Home Builders (NAHB) released its Homebuilders' Index, which measures builder confidence, which is loosely tied to housing growth. Rising builder confidence can point to rising mortgage rates, because it means more demand for homes, increasing prices and greater need for mortgages.

Where Are Mortgage Rates Going?                     

>>> Rates are not moving

The Freddie Mac Primary Mortgage Market Survey this week is showing mortgage rates moving lower for the first time in 2018. I had thought they had already moved down last week, but I guess I was just a week early. 

Tuesday’s Consumer Price Index (CPI) report indicated inflation may be cooling down, of which the 10-year Treasury fell slightly. Mortgage rates followed Treasury’s and ended a nine-week surge.

It is always important to note that data for the survey was collected early in the week and therefore does not necessarily reflect current market conditions. The downward trend has not reversed itself quite yet, though, and has continued throughout the week. Yesterday’s soft Producer Prices and Retail Sales readings certainly played a part in keeping rates lower.

If we look at the yield on the 10-year Treasury note, which is the best market indicator of where mortgage rates are going, we can see that it is down to 2.82% right now.

Rate/Float Recommendation           

>>> Lock now before we get a shift back upward

We strongly recommend that you take action now while rates are low because the long-term trend remains for rates to move considerably higher; many analysts are still calling for the 30-year fixed rate to move above 5% sometime this year.