Mortgage Rates May 24 2017

Mortgage Rates For May 24, 2017 are starting off the day flat; similar to levels seen on Tuesday.  Both fixed rate mortgages and adjustable rate mortgages will start off the day with little direction as it’s another day of minimal economic data readings.  This morning we had the MBA purchase index, Mortgage Refinance index, 30 year average mortgage rate,  existing home sales data along with crude oil inventories.

Later today we have the all important Federal Open Market Committee (FOMC) minutes.  This has the potential to mortgage interest ratemove the market so it will be closely watched by investors and analyst.  When it comes to mortgage rates; more specifically Mortgage Backed Securities (MBS) too much inflation is bad and low to no inflation is good.  Lately some of the data the FOMC follows is showing a deceleration of inflation and it will be important to see if that is a concern or is it viewed as a temporary slow down in a greater picture of increasing inflation.  Low California home loan rates are still near their 2017 lows however if the Fed indicates they are concerned about the bigger picture of inflation than mortgage rates might spike on the news.  Or if the Fed sees inflation concerns easing and is starting to worry about low inflation than that will be good for Mortgage Backed Securities and we may see mortgage terms improve.

As always we’ll keep an eye on things today and we see a significant move in mortgage rates and/or important events that may move the market.  If you would like a quote for your next mortgage transaction you can contact us directly at 1-800-550-5538.  We’re a top rated company with the Better Business Bureau, the Business Consumers Alliance and offer industry low mortgage rates.

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UPDATE:  ECB’s Draghi is out with some statements this morning and the 5 year auction was better than expected. The market is reacting positively to the FOMC meeting minutes despite some of the wording about reducing the Feds balance sheet.  The 10y yield dipped to 2.25 and Mortgage Backed Securities (MBS) have rallied.

RTRS – ECB’S DRAGHI SAYS THE MACROECONOMIC ENVIRONMENT IS IMPROVING

RTRS – ECB’S DRAGHI SAYS OUR CURRENT ASSESSMENT OF THE SIDE EFFECTS SUGGEST THEREFORE THAT THERE IS NO REASON TO DEVIATE FROM THE INDICATIONS WE HAVE BEEN CONSISTENTLY PROVIDING

RTRS – U.S. SELLS $34 BLN 5-YEAR NOTES AT HIGH YIELD 1.831 PCT, AWARDS 7.84 PCT OF BIDS AT HIGH

Below is the official wording from the FOMC minutes about it’s reinvestment policy:

Per FMOC: “System Open Market Account Reinvestment Policy Participants continued their discussion of issues related to potential changes to the Committee’s policy of reinvesting principal payments from securities held in the SOMA. The staff provided a briefing that summarized a possible operational approach to reducing the System’s securities holdings in a gradual and predictable manner. Under the proposed approach, the Committee would announce a set of gradually increasing caps, or limits, on the dollar amounts of Treasury and agency securities that would be allowed to run off each month, and only the amounts of securities repayments that exceeded the caps would be reinvested each month. As the caps increased, reinvestments would decline, and the monthly reductions in the Federal Reserve’s securities holdings would become larger. The caps would initially be set at low levels and then be raised every three months, over a set period of time, to their fully phased-in levels. The final values of the caps would then be maintained until the size of the balance sheet was normalized.”