Mortgage Rates May 8 2017

Mortgage interest rates for May 8, 2017 were flat when compared to last week although the 10y yield has risen this morning to just over 2.37%.  Mortgage Backed Securities were slightly weaker but only by a few basis points; nothing significant so most mortgage lenders will start of the week with rates similar to Friday.  As for economic reports and auctions; we have the employment trends reading which mostly came in line with expectations and later today we have the 26 week and the 52 week auction.

James BullardSt. Louis Fed President was out with some comments earlier today; mostly about how he felt rates did not need to rise any further and implied that the Fed should consider moving forward with reducing their balance sheet.  Whenever that term comes up “reducing their balance sheet” bond traders get nervous; and generally speaking that has a negative affect on the bond markets.  For the most part this is why the 10y yield is higher this morning as traders digest Bullard’s comments.  Most bond traders have been preparing for an eventual reduction so when it happens (most likely in the next 12-36 months) the market should be prepared for it and no panic.  Many thought that when the Fed stopped putting new money into the bond market that rates would raise significantly and that never happened.  Initially yields, and the best mortgage rates,  moved up however as time went on yields moved back down and even lower.  When the Fed reduces it’s balance sheet it’s not 100% clear what the long term ramifications will be for the bond market.  Most bond traders would probably say it means higher yields and some would say it’s uncertain….very few if any will say it would result in lower yields.  If you are considering a refinance or are purchasing a new home please be sure to give us a call at 1-800-550-5538 for a no cost no obligation quote.  We offer low mortgage rates throughout the entire State of California and have a top rating with the Better Business Bureau and the Business Consumers Alliance.