It’s Tuesday, October 10th and mortgage rates continue to trend upward, but ever so slightly. The good news is that mortgage rates remain at long-term lows, even for 2017.
Check out this animated illustration of weekly 30-year fixed rate trends for 2017 as reported by Freddie Mac.
— Leonard Kiefer (@lenkiefer) October 8, 2017
This leaves you with an opportunity to refinance and lower your monthly payment or purchase a new home at historically low rates.
Here are a few of the things that we are watching in the market to advise you on which way mortgage rates are headed:
Last week’s jobs report
- Although we lost 33,000 jobs in Sep, despite expectations of adding 90,000 jobs, the market largely ignored the report on the assumption that this was a direct and temporary effect of recent hurricanes.
- Despite this short-term loss in jobs, average hourly earnings were up 0.5%. This is demonstrating a tightening and competitiveness in the labor market. Giving some economist the first glimmer of inflation.
Where is inflation?
- Inflation has become the focal point for most economist and investors attempting to determine where we are in the economic cycle. A positive economic cycle that is long in the tooth and ready for a radical correction.
- This week we will get data on inflation, consumer confidence, and retail sales.
- Investors, economist, and market participants will pour over this data for any hints of inflation. But, most expect to be disappointed.
- Interesting note: Quicken Loans founder Dan Gilbert made an interesting case on CNBC last week that perhaps inflation will stay abated because of the increased efficiency in supplying consumer demand. Think Amazon.com, FedEx, UPS. Get everything you want, almost instantly!
A New Fed Chief?
- Another thing that is quickly entering the calculus of future interest rates is who will be running the Federal Reserve.
- Will there be a new Fed chief? Who might it be? Will President Trump just stay with Chairman Yellen? What will any or no change to the Fed Chair bring?
- Either way, we seem sure to get at 0.25% hike in December. Will it make a difference? Probably not.
December rate hike is a sure thing?
- Wall Street is giving a December rate hike between a 75-92% chance, depending on your favorite survey.
- At this level of probability and the recent upward movement in the 10-year treasury rates, I’m assuming that the rate hike is almost 100% baked in.
- Meaning that the ‘official’ announcement in two months is unlikely to create any significant move in mortgage rates.
What questions do you have?
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