Mortgage Rates Increasing with Inflation Concerns Over Oil

Mortgage rates today are higher. Yesterday's afternoon release of the Fed's "Beige Book" confirmed that the economy is growing at a moderate pace However, there are concerns about impending tariffs and rising costs due to the trade war. Rising prices (inflation) scares investors and causes bond prices to fall and interest rates to rise.

Where Are Mortgage Rates Going?                     

>>> Rates are increasing

This morning's Weekly Jobless Claims report came in with 232,000 new claims for benefits, nearly pegging analysts’ predictions, and so having no effect on today's mortgage rates. However, the mortgage rates are increasing as the 10-year Treasury is now past 2.90% and is still seeing its yield increase even higher.

Inflation concerns are always a worry for long term rates, and they have seen an increase somewhat with the rapid increase in the price of crude oil recently. It has increased gas prices and if the price stays high will have price impacts on other goods and services, let alone consumer pocket books.

Rate/Float Recommendation           

>>> Do not get caught, best to lock

There is just too much volatility going on right now that the market is trying to speculate on which way it should go. Long-term rates are expected to move steadily higher. It makes sense, then, for most borrowers to lock in a rate as soon as possible.

In a rising rate environment, the decision to lock or float becomes complicated. Obviously, if you know rates are rising, you want to lock in as soon as possible. 

However, the longer you lock, the higher your upfront costs. If you are weeks away from closing on your mortgage, that is something to consider. On the flip side, if a higher rate would wipe out your mortgage approval, you would probably want to lock in even if it costs more. If you have yet to talk to a lender, give me a call or visit my website at CallThe Money Man.