Mortgage Rates Holding Ahead of Busy Week of News

Mortgage rates today are nearly unchanged from Friday's close. We received some important data, but the actual figures did not vary much from expectations. Rates seem to be in a holding pattern as we do have a very busy week ahead in the markets with a Fed meeting and the April Jobs Report on tap. We could see some movement this week as rates are poised to continue moving higher in the near-term, so borrowers will likely get the better deal by acting soon.

Where Are Mortgage Rates Going?                     

>>> Rates at high levels, and may continue to move even higher

What a wild month we have had as this is the last day of April, and we have now seen another jump in the past several weeks as mortgage rates are at high levels on the year.

Early last week, the yield on the 10-year Treasury note, which is the best market indicator of where mortgage rates are going, jumped up over 3.0% to its highest position since late 2013, but is currently back down at 2.96%. Mortgage rates typically move in the same direction as the 10-year yield so it was no surprise that mortgage rates had a notable spike last week with the average rate on the 30-year fixed rate mortgage moving eleven basis points higher up to 4.58%, according to the Freddie Mac Primary Mortgage Market Survey.

The 10-year yield, however, wasn’t able to persist over 3.0% for very long and currently sits down a couple basis points on the day at 2.95%. We did get the Federal Reserve’s favorite inflation reading out today, revealing that inflation is just below the Fed’s target of 2.0% at 1.9%.

All eyes will turn to the FOMC on Wednesday afternoon, as the market is not planning a change on the interest rates - which at this point seems to be status quo – but more about any wording changes to their written statement. Financial market participants will no doubt get out their finest toothed combs as they go through the written announcement on Wednesday afternoon with the hope of finding at least one clue about the future of monetary policy.

After that meeting is over investors will turn their eye toward the Employment Situation (a.k.a. the monthly jobs report) for April, which will get released early Friday morning. Analysts are calling for 190,000 jobs added in April. Investors will also be looking closely at average hourly earnings. The consensus is for a 0.2% rise. Anything at or above that level would satisfy investors and put some upward pressure on mortgage rates.

Also, there could be some concerns as there are fears surrounding the implosion of the Iran arms deal than today's economic releases - even though these are some of the more important pieces of data we get each month. In addition, top economic officials are heading to China to hopefully avert a trade war. Destabilization in the Middle East could cause oil prices and rates to rise. Averting a trade war could be good for the economy and cause rates to rise. The reverse of both of those possibilities is also true.

There is clearly a lot happening this week. That means that there are plenty of chances for mortgage rates to bounce around and adjust as the news comes in. Right now, it still seems as though mortgage rates are much more likely to move higher than they are to retreat back down.

Rate/Float Recommendation           

>>> Lock now before rates move higher

With mortgage rates at high levels on the year and poised for more upward movement, it makes sense for most borrowers looking to buy a home or refinance their current mortgage to lock in a rate sooner rather than later. The longer you wait, the more likely it is that rates will be higher when you finally decide to take action.

Despite what happens in the near-term, mortgage rates are still expected to move higher in the long run so locking in a rate sooner rather than later remains the smart decision for most borrowers. If you have any further questions, give us a call or visit our website at Call The MoneyMan.