After this morning’s tame Consumer Price Index (CPI) report mortgage rates for April 10, 2019 are starting off the day at similar levels to yesterday (more on the CPI report below). Conforming and FHA fixed mortgage rates (specifically 30 year and 15 year fixed rate mortgages) continue to be near their recent lows as mortgage rates appear to be settling into a range after the significant move down that occurred towards the end of March 2019.
A possible trade deal with China remains the biggest issue for mortgage rates moving forward.
FHA Mortgage Rates
Jumbo Mortgage Rates
Mortgage Backed Securities and Treasury Snapshot:
Mortgage Backed Security FNMA 4.0 opened the day at 102.63, and FNMA 3.5 opened the day at 101.02. The 10y Treasury yield started the day at the 2.50% level.
President of the European Central Bank (ECB) Mario Draghi is helping Mortgage Backed Securities and Treasuries rally after this morning’s open.
Without exactly saying it Mr. Draghi essentially confirmed that the European economy has significant issues and it’s unlikely they’ll be fixed any time soon. During and after his press conference bonds rallied. The 10y Treasury moved to 2.46%, FNMA 4.0 moved to 102.70 and the FNMA 3.5 moved to 101.14.
Will this help mortgage rates? If the current rally holds or continues for the next few days then yes we should see improvements to mortgage rates.
Economic Data – This Week:
Today we have the weekly Mortgage Market Index, Core CPI (Consumer Price Index) and FMOC Minutes. On Thursday we have Core Producer Prices and on Friday we have Import and Export Prices along with 1yr and 5yr Inflation Outlook.
This mornings CPI Index came in at 2.0% and expectations were for a 2.1% increase (year/year) and the month to month reading came in 0.4% and expectations were for a 0.3% (ex food/energy component and the month/month CPI reading came in below expectations).
The market’s response was muted due to the mixed bag report. The higher month to month reading was a negative for mortgage rates however the year to year reading came in below expectations.
Five minutes after the report’s release the 10y Treasury was higher (2.51%) however Mortgage Backed Securities were slightly positive. The report will most likely have little effect on mortgage rates.
Weekly Mortgage Market Index:
After a significant move up last week today’s Mortgage Market Index showed a decrease in overall mortgage application volume. The Mortgage Refinance Index came in at 1582.6 (last weeks reading was 1786.0) and the Mortgage Purchase Index came in at 278.1 (last week the reading was 276.1).
The overall Mortgage Market declined from 503.6 last week to 475.6.
Seeing a reduction in the number of applications is not a bad thing for mortgage lenders (after a surge in the number of applications received). Lenders can only process so many applications at a time and surges in loan applications can cause delays if they were to continue for several weeks.
At 2:00pm EST the Fed will release the minutes from their previous meeting. If any significant news comes out from the release and/or we see a significant move in the market I’ll update today’s post with that information.
JB Mortgage Capital, Inc.:
We offer industry low mortgage rates for both refinance and purchase transactions, personal one-on-one service and we have an A+ rating with the Better Business Bureau (BBB). We also have a top rating with the Business Consumers Alliance (AAA). We utilize the latest technology to ensure a fast closing and Loan Officer Kevin O’Connor has over 14 years of experience as a mortgage professional.
When it comes to mortgage rates please keep in mind that mortgage rates adjust daily; sometimes they adjust multiple times in a day when the bond market is volatile. Also things like obtaining cash out, lower credit scores, higher Loan-To-Value ratios, rental properties and the subordination of a second mortgage will cause in an increase in your mortgage rate.