Mortgage Rates Unchanged Despite Positive Economic News
Mortgage rates today are nearly unchanged from yesterday. The only economic news was not great for rates. The release of the first quarter 2018 Gross Domestic Product and Consumer Sentiment both showed greater-than expected gains. The numbers were great for the economy, but not high enough to push rates higher after yesterday’s slight improvement. Higher numbers with these reports indicate economic heat, which leads to price increases / inflation / higher mortgage rates.
Where Are Mortgage Rates Going?
>>> Rates are steady at high levels not seen in four years
Global tensions relaxing a little, as we had both the North and South Korean leaders met at the DMZ, the first meeting between the two leaders in over 10 years. Both North Korean leader Kim Jong Un and South Korean President Moon Jae-in pledging to work for the "complete denuclearization of the Korean peninsula". Both are saying they would work with the United States and China this year to declare an official end to the 1950s Korean War and seek an agreement to establish “permanent” and “solid” peace. Their meeting comes weeks before Kim is due to meet U.S. President Donald Trump in what would be the first-ever meeting between sitting leaders of the two countries. A fist giant step, hope is high.
The focus for financial market participants is still on the bond market, with the yield on the 10-year Treasury note (the best market indicator of where mortgage rates are going) back below 3.00%. It is apparent now the key specific level going forward is 3.03%. Traders are going to eye that as a significant technical support level.
Even though we are seeing interest rates consolidating here, there is no change in the bearish outlook – the Fed will increase rates, labor costs are increasing - and inflation worries alive and well. Right now, the yield is at 2.96%.
Easing global concerns over trade and the North Korean threats have helped the bond market a little, but there is no reason to think interest rates are going to fall much from these levels. What markets are experiencing presently is a consolidation and a little retracement after the rapid rate increase that pushed oversold indicators to extremes. The best we can see from a pure technical observation is the 10 may decline to 2.95% or more before renewed selling occurs.
>>> Lock now before rates move higher
Mortgage rates moved higher this week as the yield on the 10-year Treasury note jumped above the significant psychological threshold of 3.0%. They are holding fairly steady at those levels as we finish out the week. It seems as though they are more likely to move higher than lower over the coming weeks so anyone looking to buy a home or refinance their current mortgage is probably going to be better off locking in a rate soon. If you have any further questions, give us a call or visit our website at Call TheMoney Man.