Rates Looking to Push Upward

Mortgage rates are looking to push upward this morning, even with no pertinent economic releases today.  The biggest increases we have seen has been in the government-backed loans as these are often able to absorb price increases better than others.  With no news, the markets are following again the various financial data keys, such as gold, oil, and the 10-year Treasury, which is the best indicator of where mortgage rates are going.

Where Are Mortgage Rates Going?                     

>>> Rates are sideways looking up

Ever since mortgage rates moved higher at the end of February we have seen them stay in a relatively tight range. Even with the dips and jumps, the market has corrected itself and has kept them in the middle to upper four range (4.50 – 4.55%), according to the most recent Freddie Mac Primary Mortgage Market Survey from last week.

Trying to think through where mortgage rates will go from here is somewhat of a futile task, as rates are extremely fickle and unforeseen events almost always poke their ugly head into the arena, ruining even the most well thought out projections. However, all we can ever do is work with what we are given and adjust along the way. It does seem as though the Fed is positioning themselves towards a more cautious rate hike path during the remainder of 2018.

Historically, we are looking at a push out until the September meeting. That means another two Federal Open Market Committee meetings  (June and August) before we see the nation’s benchmark interest rate, the federal funds rate, move up a quarter point to the new target range of 2.00%-2.25%.

Mortgage rates are not directly tied to the federal funds rate but the word out from the Fed certainly has an impact on the direction of the market. There will be numerous opportunities for the Fed over the coming months to either play up or walk back their next adjustment. Those moments are when mortgage rates will be the most susceptible to a dip or spike.

Rate/Float Recommendation           

>>> Lock now is probably your best bet

Mortgage rates are staying relatively flat today. It is a slow day as far as economic data so this is not surprising. Right now, we still believe that locking in a rate sooner rather than later is the smart play, especially what we are seeing with the Mortgage Backed Securities. Given the current market environment, it seems more likely that rates will rise than fall. If you want to avoid the risk of locking in after this happens, you should lock in your rate now. If you have any further questions, give us a call or visit our website at Call The Money Man.