Mortgage rates for March 05, 2019 are starting the day flat as both Mortgage Backed Securities and Treasuries start the day in negative territory. Yesterday’s Construction Spending (Dec) was significantly worse than expected. The report sparked a decent rally in Treasuries however Mortgage Backed Securities barely improved.
Mortgage Backed Securities and Treasury Snapshot:
Mortgage Backed Security Coupon FNMA 4.0 opened the day at the 101.27 level and the 10y Treasury opened at the 2.735% level. As mentioned above; Treasuries rallied yesterday afternoon after a dismal Construction Spending report came in below expectations. The final reading came in at -0.6% well below the 0.2% analyst were expecting. This helped push the 10y Treasury yield from 2.75% to just below 2.72%. Unfortunately Mortgage Backed Securities did not have the same reaction to the poor economic data.
FHA Mortgage Rates
Economic Data – This Week:
Today we have 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.
New Home Sales and ISM Non-Manufacturing Data:
These reports come out later this morning. If they significantly affect the market I’ll update today’s post. New home sales will be an interesting report to review; will there be a bounce back due to lower mortgage rates? If the recent news from Toll Brothers is any indication today’s report will not be good. Home builders have been struggling for months. Clear evidence started showing up in October which means sometime between July – September there was a shift in sentiment among buyers. Higher mortgage rates combined with higher priced homes pushed many buyers out of the market. However in 2019 you’ve seen mortgage rates come down along with prices however it does not appear that buyers are rushing back into the market.
Mortgage Rates Might Move Higher After The Employment Report:
We’re keeping a close eye on Friday’s BLS Employment report. Mortgage rates in 2019 have been in a range however heading into the Employment report mortgage rates are near the top of that range. The last two BLS Employment reports were significantly stronger than anticipated. Overall they were great reports and ended putting pressure on mortgage rates to move up. Expectations are for 180,000 jobs created, a 0.3 increase in wages and an unemployment rate of 3.90%. If the report shows significantly higher number of jobs created that might just be enough to push mortgage rates above the range that that started back in January.
What if it’s a weak report?
Tough to guess but I would think the main benefit from a weak report would be to keep mortgage rates within their range; that would be a big win for mortgage rates. I would not expect a significant move down for mortgage rates if the BLS Employment report came in well below expectations.
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.