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.
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