Mortgage rates for April 11, 2019 are stable for now as the market continues to digest the release of the Fed minutes, various economic reports, Brexit and a possible end to the trade war with China. While yesterday was a good day for the bond market we’re seeing those gains reversed after this morning’s release of the Core Producer Prices and weekly Unemployment reports (more on this below).
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Mortgage Backed Securities and Treasury Snapshot:
Mortgage Backed Security FNMA 4.0 opened the day at 102.64, and FNMA 3.5 opened the day at 101.06. The 10y Treasury yield started the day at the 2.48% level.
Yesterday the 10y Treasury yield moved as low as 2.46% after a solid 10y auction, Fed Minutes release and ECB President Mario Drahgi’s press conference. Mortgage companies held back on passing along the gains to consumers to see if the lower levels would hold into today. Unfortunately things have turned higher this morning so unless there is a rally in bonds later today mortgage rates will remain at/similar to yesterday’s levels.
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Economic Data – This Week:
Today we have the weekly unemployment claims and Core Producer Prices. On Friday we have Import and Export Prices along with 1yr and 5yr Inflation Outlook.
Weekly Unemployment – CPP:
This morning’s weekly unemployment claims came in well below expectations. The report showed 196,000 people filed unemployment claims and the expectations were for 211,000 claims. Last week the report showed 202,000 people filed unemployment claims.
The Core Producer Prices index came in higher than expected (month/month). Expectations were for a 0.2% increase and the report showed a 0.3% increase (last month the reading came in at a 0.1% increase). The year over year report came in at expectations; a 2.4% increase.
Overall these reports are not bond/mortgage rate friendly. Lower unemployment and higher inflation are negatives for mortgage rates.
Economic Data – Next Week:
On Monday we have the NY Fed Manufacturing report, Tuesday is the NAHB Housing Market Index and Industrial Production for March. On Wednesday we have the weekly Mortgage Market Index, Refinance Index and Purchase Index. We also have Wholesale Sales and Wholesale Inventories. On Thursday we have the Philly Fed Business Index for April and Retail Sales for March. On Friday we have the Building Permits and Housing Start reports.
Brexit, China and Mortgage Rates:
What do Brexit and China have to do with mortgage rates? A solution to Brexit and the trade war with China would be a positive for the world and United States economy. Brexit has been seen as a drag on economic advancement. The UK and European economies have been struggling in 2019 so positive economic news could be a negative for bonds/mortgage rates.
Many analyst and investors think one of the biggest things holding back the U.S. economy is the trade war with China. Recent news reports have indicated that a resolution to the trade war with China is near. Keep in mind that this is not the first time a resolution has been anticipated and if a resolution does not unfold in the next few weeks optimism might fade.
However if a deal is reached bonds might selloff and push mortgage rates higher. If that happens it does not mean that a new long term trend higher has been established. At the end of the day the most important thing for bonds and mortgage rates in the economy. And right now some areas of the economy are struggling and those problems would need to see improvement for mortgage rates to move back to levels seen in summer/fall 2018.
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.
To obtain the most up-to-date quote, specific to your loan scenario be sure to contact Loan Officer Kevin O’Connor at 1-800-550-5538 or you can submit a “Contact Us” request on the our website.