Mortgage rates for February 12, 2019 will be under pressure as a possible resolution to keep the government open might have been reached (as of the this morning the government is set to shutdown again on Friday). 30 year fixed rates and 15 year fixed rate mortgages remain near their 2019 lows however that may not continue if bonds continue to selloff. For the second day in a row both Mortgage Backed Securities and Treasuries are selling off in early morning trading.
Mortgage Backed Securities and Treasury Snapshot:
FNMA 4.0 opened the day at the 102.02 level and the 10y yield started the day at the 2.68% level. As mentioned yesterday ideally we would like to see the 10y Treasury yield stay below 2.72%; an important trading level for bonds.
FHA Mortgage Rates
A Government Shutdown Might Not Happen:
Late yesterday it was announced that a compromise in principle was reached to keep the government open and avoid a second shutdown in 2019. The deal between 17 top Republican and Democrat leaders in both the House and the Senate provides less than 25% of “border wall” funding that the President was demanding and some question whether or not he would sign on to such a deal. Furthermore the deal to keep the government open may not even pass the House and Senate as is due to some Republicans demanding full funding for a border wall while some Democrats demanding no government funds go to a border wall.
Why This Matters To Mortgage Rates:
Another government shutdown would be bad for the economy but a possible positive for mortgage rates. When the economy slows mortgage rates tend to improve but not always and it’s something we’ll be keeping an eye on. For now the possible resolution to avoid the shutdown is pushing bond yields higher (as well as mortgage rates) however the damage is somewhat contained so far. That might be because the market does not believe the President will sign on to the deal or the market might feel even if this is resolved it’s not going to help improve things much. Also it does not appear that the deal has a significant increase in large-scale spending plans (ie a transportation spending). That’s a positive for mortgage rates.
There are no major economic reports today and later this week we have: Wednesday we have the Core CPI report (important for mortgage rates) and weekly Mortgage Market data. Thursday we have the Core Producer Prices report (somewhat important for mortgage rates) and weekly unemployment claims Friday we have Import and Export prices and the 1y and 5y inflation outlook.
CPI Report Tomorrow:
Tomorrow is a big day for mortgage rates and bonds. The CPI report is one of the most important inflation gauges that the Fed, analyst and investors watch on a monthly basis. If inflation is higher than expected then that is a negative for mortgage rates. If inflation is is lower than expected then that is a positive for mortgage rates. The report comes out at 8:30am eastern.
Currently We Are Seeing:
30 year fixed mortgage rates below 4.375%, 20 year fixed mortgage rates below 4.25% and 15 year fixed rates below 3.75%. 30 year fixed FHA mortgage rates are below 4.125%. 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 get 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.
JB Mortgage Capital, Inc.:
We offer industry low mortgage rates, personal one-on-one service and we have an A+ rating with the Better Business Bureau (BBB). We also have the 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 Loan Officer. You can contact him directly at 1-800-550-5538.