Mortgage Rates Lower Despite Economic News

Mortgage rates today are lower for the most part, even though data releases pointed to increasing rates. What we are seeing this morning, according to Mortgage News Daily, is a late rebound in bond prices yesterday, reversing yesterday morning's higher rates. Our economic data today was a mixed bag, but not enough to move rates out of our tight range.

Where Are Mortgage Rates Going?                      

>>> Rates staying in tight range

Housing Starts and Building Permits for March (health of building industry) both came in significantly higher than expected, good for the industry and economy but less-great for mortgage rates. Industrial Production and Capacity Utilization also came in higher than expected and can mean potential inflation.

The 10-year Treasury note has dropped its yield to 2.83% after pushing higher yesterday. 

Earning’s season barely under way but what is coming out is strong earnings as most have been expecting.  Stock markets now may turn focus on the economy rather than the trade fears that have dominated market the last three weeks. Trades still going to be a major economic issue but investors’ time frames are measured in weeks, not months. A lot of belief stock buybacks will increase this year, a positive for stocks with less to buy.

Mortgage interest rates depend on a great deal on the expectations of investors. Good economic news tends to be bad for interest rates because an active economy raises concerns about inflation. Inflation causes fixed-income investments like bonds to lose value, and that causes their yields (another way of saying interest rates) to increase.

Rate/Float Recommendation           

>>> Lock now as there is little value on floating

Look for rates to trade sideways through the rest of the day with relatively low volatility.  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.