Mortgage rates for February 28th, 2019 will start the day at higher levels than yesterday due to early morning selling in the bond market. Mortgage Backed Securities and Treasuries started the day in negative territory after this mornings GDP Preliminary and weekly jobless claims reports. After yesterday’s open Treasuries sold off sharply however Mortgage Backed Securities only saw moderate declines.
As We Wrap Up February:
Fixed mortgage rates remained in a range during the entire month and that looks to continue into March. What will break the range? Impossible to say at this point and we’ll have to keep watching for potential breaks as the range moves into March. It will be interesting to see how long this range lasts and which direction mortgage rates will go in March.
Mortgage Backed Securities and Treasury Snapshot:
Mortgage Backed Security Coupon FNMA 4.0 opened the day at the 102.04 level and the 10y Treasury opened at the 2.66% level. Post economic reports FNMA 4.0 coupon moved down to 101.32 and the 10y yield hit 2.70%.
FHA Mortgage Rates
Today we had the GDP Prelim Q4 report, weekly jobless claims and later this morning we have the Chicago PMI report. We finish off the week with Core PCE, Personal Incomes, Retail Sales (January), and ISM Manufacturing PMI (February).
The preliminary GDP report came in higher than expected. Expectations were for a 2.3% increase and the reading came in at a 2.6% increase. Good news for the economy not so good news for mortgage rates. In addition to the preliminary number we also had the 2018 annual GDP report; growth came in at 2.9% which was an increase from 2.2% increase in 2017.
Why This Matters To Mortgage Rates:
Positive economic news is generally a negative for mortgage rates and this mornings GDP was a positive for the economy. The initial reaction to the report was to sell on the news. After hitting 102.06 before the report; FNMA 4.0 moved back down to the 102.02 level and then sold off further to 101.31. The 10y Treasury yield moved from 2.66% – 2.68% post report and then to 2.70%.
Weekly Jobless Claims:
Weekly jobless claims came in higher this week (225k vs last weeks 220). Continued claims rose to 1.805 million from last weeks 1.733 million print. We continue to keep an eye on this report. If the economy continues to slow unemployment claims and/or continued unemployment claims should move higher. We are still aways off from it being a concern however these levels are higher than some of the reports pre-slowdown.
The Fed’s Balance Sheet and Mortgage Rates:
The last two day Fed Chairman Powell testified before Congress. A hot topic of conversation is the Fed’s balance sheet and what they plan to do with it. This is very important to Mortgage Backed Securities and consumer mortgage rates as the Fed holds billions of dollars of Mortgage Backed Securities. As a largest investor in the primary market that sets current mortgage rates it is essential that the Fed communicates clearly it’s intentions to avoid market disruptions. If the Fed does move to end it’s balance sheet reduction program that might be a positive for mortgage rates moving forward. According to the Chairman’s testimony; the Fed is nearing an end to it’s balance sheet reduction program and hopes to communicate soon their plan.
Economic Data For Next Week:
Next week we have ISM-New York Index and Construction Spending on Monday. Tuesday we have ISM Non-Manufacturing and New Home Sales. Wednesday we have the ADP Employment report and weekly Mortgage Market Index data, Thursday we have Labor Costs and Productivity along with Consumer Credit. On Friday we have the BLS Employment report, Wholesale Inventories and Wholesale Sales.
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 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.
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. You can contact him directly at 1-800-550-5538.