Mortgage Rates Flat - Inflation vs Global Concerns

Mortgage rates are moving sideways as it waits for further economic indicators after what was reported today.  Even though we have seen the markets react to certain news that concerns inflation, there is still a lot of news out there over the globe that can set the tone for the traders to move from this tight range we are in.  We have seen a big jump in rates thus far this year, but recently have seen it flatten out.  Even with the jumps that have occurred, the market has corrected itself when this volatility has occurred.

Where Are Mortgage Rates Going?                     

>>> Rates steady after preliminary inflation reports

The business optimism and PPI came out very strong than what was anticipated this morning. What had been a market shaker in the past, seems to have thrown caution thus far, as most now want to see if this flows through to tomorrow's CPI.  If it does, then MBS will be under some pressure.  But for today, look for MBS to once again trade in a narrow range with no upside.

There are a ton of juicy geo-political headlines, however none of them change how bond traders view future economic growth and are not a factor in pricing at this stage.  We still have very strong overhead pressure due to a growing economy and concern over a concerted effort by the Borg collective (10 points to anyone that knows which Star Trek that is a reference to) of the central banks getting ready to tighten.  But that is offset by concerns over a trade war and military action in Syria. The yield on the 10-year Treasury note, which is the best market indicator of where mortgage rates are going, has hit its resistant level of 2.80%, as it is now at 2.79% while I am finishing this report.

Global trade continues to lead markets, and we saw overnight a momentary respite from the tensions. Chinese Pres. Xi Jinping made a step forward saying foreign companies will have greater access to financial and manufacturing sectors, including reduced tariffs on imported autos. His remarks, with soothed concerns about a trade war, spurred a rally in global stocks. One take away rather than concessions to Trump is China trying to paint itself as a worthy global trading partner.  Once again, there may not be a trade war if new deals can be agreed upon - but this could and will take months to achieve. In the meantime the ebb and flow will continue with each Tweet and responsive comments from China.

Rate/Float Recommendation           

>>> Lock now while rates are low

If the recent trade pattern in stocks continues today, indexes will see its gains through most of the session then back off in the last hour.  Interest rate markets yesterday are showing very little movement, and reacts a bit with the shift as this occurred yesterday. With the lack of volatility, mortgage rates will remain relatively flat. 

This is good news for anyone still looking to buy a home or refinance their current mortgage. Inventory is low, and there are a number of buyers who want to move and are fearful of rates.  Rates are on track to move higher as the year unfolds so most borrowers will be better off locking in a rate soon.  If you have any further questions, give us a call or visit our website at Call The Money Man.