Mortgage rates for March 01, 2019 will start the day at higher levels as the bond market continues to sell off post GDP report. The Wednesday report sparked selling in Treasuries that has spilled over to the Mortgage Backed Securities market. However for now, mortgage rates remain within their recent range as we head into the weekend. There is some risk that the top end of the range for mortgage rates might be broken if the selling in the bond market continues.
Mortgage Backed Securities and Treasury Snapshot:
Mortgage Backed Security Coupon FNMA 4.0 opened the day at the 101.28 level and the 10y Treasury opened at the 2.74% level. After the early morning economic reports there was little change to opening levels. The FNMA 4.0 is below an important level right now (102.00) and the 10y yield is above the 2.72% level; another key technical level for bonds. A stronger than expected ISM report later this morning might further increase the selling pressure in bonds. If that happens mortgage rates will most likely adjust higher if the selling is significant.
UPDATE: After the ISM report (more on that below) Mortgage Backed Securities improved slightly however not enough to reverse the days higher mortgage rates.
FHA Mortgage Rates
Today we had the Core PCE, Personal Incomes, and at 10:00 am EST we have the ISM Manufacturing PMI (February) report. 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.
Core PCE Report:
This mornings Core PCE report came in at expectations: 1.90%. This is an important inflation report and can influence the investment/trading decision investors make. When inflation reports come in as expected this is a positive for mortgage rates on a day when there’s risk for them moving higher. Along with the CPI report the market keeps a close eye on the Core PCE report.
According to the Commerce Department report; Personal Incomes declined in January coming in at -0.1%, expectations were for a 0.3% increase. Overall this is a positive for mortgage rates since rising incomes can be tied to higher inflation. As for the economy; this is a negative since consumers are earning less money.
ISM Manufacturing Report:
The ISM Manufacturing report is out at 10:00am EST and we’ll update the post later in the day with the results. Expectations are for a 55.5 reading. Last’s months reading was at 56.3. This is another key report that investors and the Fed watch.
UPDATE: ISM Manufacturing came in below expectations at 54.2 (expectations were for 55.5). In addition a Consumer Sentiment report also came in below expectations at 93.8 (the Consumer Sentiment report is generally not a market moving report however today it’s helping keep a lid on selling in the bond market).
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.