Mortgage rates for March 12, 2019 will start the day at the same levels as yesterday. This morning’s CPI report was a bit below expectations and there was little to no bond market reaction to the report (more on this below). Conforming and FHA fixed mortgage rates remain near their one year lows and well within their range which started back in January. Today’s mortgage rates continue the trend sideways however at some point that trend will be broken. The move outside of the range could be significant and it’s something to keep an eye on.
Afternoon Mortgage Rate Update:
After a strong 10 year Treasury bond auction this afternoon Mortgage Backed Securities rallied into the close and the 10y Treasury yield moved below the 2.62% level (currently the 10y yield is at 2.60%). This is good news for mortgage rates IF the rally is continued/confirmed over the course of the next 3-5 days. Until it is confirmed mortgage companies will most likely take cautious approach to mortgage rates in case bonds selloff instead of confirming today’s rally.
FHA Mortgage Rates
Mortgage Backed Securities and Treasury Snapshot:
Mortgage Backed Security Coupon FNMA 4.0 opened the day at 102.04 and the 10y Treasury yield started the day at the 2.65% level. After this morning’s CPI report there was some improvement to both Mortgage Backed Securities and Treasuries however it was not significant. FNMA 4.0 moved up to 102.06 and the 10y yield improved to the 2.63% level on the weaker than expected CPI report (more on the CPI report below). Next week is the Fed meeting and the bond market will definitely be interested in what the Fed has to say about the current economy and future expectations. The meeting starts on Tuesday and their announcement comes out Wednesday afternoon. Nearly no one is expecting the Fed to raise rates at this meeting however that is not certain.
Economic Data – This Week:
Today we have the CPI report and there is a 10yr Note Auction. Wednesday there is the weekly Mortgage Market Index, Core Producer Prices report, Durable Goods and a 30yr Bond Auction. Thursday we have the weekly Unemployment Claims, Export and Import Prices and New Home Sales. Friday we have the Consumer Sentiment report along with the 1y and 5y Inflation Outlook.
The CPI Report And Mortgage Rates:
Like the BLS Employment report last week; the CPI report is an important economic indicator that can influence consumer mortgage rates. As our readers know; mortgage rates have been in a range since January and currently mortgage rates are at the bottom of that range.
Two weeks ago we were in danger of moving above the higher end of the range however since then mortgage rates have moved lower and stabilized. This morning’s weaker than expected CPI report probably won’t push us to new lows but it will help keep mortgage rates within the range and that’s good news for home owners and home buyers.
Breakdown Of the CPI Report:
- Core CPI year/year: 2.1% (expectations were for 2.2%)
- Core CPI monthly: 0.1% (expectations were for 0.2%)
- CPI monthly: 0.2% (expectations were for 0.2%)
- Real weekly earnings: -0.1% (expectations were for 0.0%)
Lower inflation is good for mortgage rates; higher inflation is bad for mortgage rates. With a weaker than expected Employment (last week) and CPI report it will be interesting to see how the other major reports come in such as the ISM report. As mentioned above; at some point the range will be broken and the move outside of the range might be a significant move (depending on what pushes mortgage rates outside of the range).
Next week we have the Fed meeting. While the Fed does not set/dictate consumer mortgage rates they do have an influence over the direction mortgage rates move. Will next weeks meeting propel mortgage rates out of the current range?
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. When it comes to mortgage rates 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.