Mortgage rates for March 04, 2019 are set to start the day at similar levels to yesterday as both Mortgage Backed Securities and Treasuries start the day in positive territory. For now it appears the selling in bonds that started last Wednesday is on hold however lenders will be conservative with their rates and terms in case the selling resumes over the next day or two. Mortgage lenders would like to see some stability renter the market before getting too aggressive with mortgage rates.
Mortgage Backed Securities and Treasury Snapshot:
Mortgage Backed Security Coupon FNMA 4.0 opened the day at the 101.29 level and the 10y Treasury opened at the 2.74% level. On Friday the FNMA 4.0 coupon traded as low as 101.24 and the 10y yield went as high as 2.768%. Before we can even think about the selling being “over” we’ll need to see a good reversal and some stability. Specifically we’d like to see the FNMA 4.0 go back above 102.00 and the 10y yield go back below 2.72% (in a meaningful way).
FHA Mortgage Rates
A Broken Range:
For weeks we’ve been discussing how mortgage rates have been in a range since the end of January 2019. While mortgage rates remain within this range (currently at the top of it) the 10y yield moved above the top end of its range and Mortgage Backed Securities moved below the bottom end of their range. If we see a full reversal over the next 24-48 hours then that would be a great sign for mortgage rates heading into the BLS Employment report. The more likely scenario is that bond markets stay elevated and possibly sell off further heading into the BLS Employment report. While the break is concerning it doesn’t mean this is the definitive end to the rally started back in late November 2018. As for the 10y yield; the big ceiling is the 2.80% – 2.83% level and the 101.20 – 101.22 floor for FNMA 4.0. Breaking back into the mid 2.80% level on the 10y and/or moving below 101.20 on the 4.0 coupon would be a big negative for mortgage rates.
Economic Data – This Week:
Today we have ISM-New York Index and Construction Spending. On 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.
As previously mentioned the big report this week is the BLS Employment report. Will we have another blockbuster employment report and if so will that push mortgage rates higher? Impossible to answer that question this morning; we’ll have to wait and see what happens. Our first clue might be the ADP Employment report on Wednesday.
Economic Data – Next Week:
Next week we have three big reports: Retail Sales, Durable Goods and CPI (Consumer Price Index). If you had to pick one of the three to watch (stress had to) then you’ll want to keep an eye on the CPI. Next would be Retail Sales (last report was abysmal) and then Durable Goods.
Currently We Are Seeing:
30 year fixed mortgage rates below 4.50%, 20 year fixed mortgage rates below 4.375% and 15 year fixed rates below 3.875%. 30 year fixed FHA mortgage rates are below 4.375%.
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.