Mortgage Rates June 14, 2017

Today is the day.  The Fed rate decision is due this afternoon and everyone is expecting the Fed to raise short term interest rates by 0.25%.  Heading into the afternoon mortgage rates will be similar to yesterday.  The big question is what do they say about the economy and their expectations for mortgage interest rategrowth.  This morning we also have Retail Sales and CPI numbers to digest and these readings came in below expectations and are causing the bond market to rally.  Hard to say if the rally holds until the Fed decision of if this was a knee jerk reaction.

This morning we’re seeing the 10y yield at the 2.16% level; hard to believe nearly three months ago it was at the 2.62% level.  Mortgage Backed Securities have followed the move down and thus mortgage rates have moved down as well.  The wording of the Fed statement might have a big impact on the direction of the 10y yield however it might not.  The Fed may not say anything to surprising and thus the market would probably have little reaction to the statement given by the Fed.  If they express concern that the economy may be slowing or inflation targets might not be hit then bonds might rally.

For now though the market is at a wait and see point.  I was asked the other day: “Are 2017 mortgage rates good?” and I responded with a “yes”.  Generally speaking the industry is still at or for some lenders near the lows of 2017.  Are they at the lows of late summer/early fall 2016?  No; but compared to the last 20-30 years we are now at below average levels.   FHA mortgage rates are attractive along with conventional mortgage rates and if it can fit your budget the 15 year fixed rate is really aggressive right now.  If you have any questions or would like a no cost – no obligation quote please be sure to contact us directly at 1-800-550-5538.  We’ll update the post later today when we receive the FOMC rate decision.

UPDATE:  As expected the Fed raised short term rates 0.25% and the initial reaction to the bond market has been flat after the rally that started earlier today. The to 10y hit 2.11% prior to the FOMC announcement; currently sits at 2.12%

RTRS – FED RAISES TARGET INTEREST RATE TO 1.00-1.25 PCT, SEES ONE MORE RATE HIKE IN 2017, LONGER-RUN PATH UNCHANGED