Mortgage rates for May 01, 2019 are starting off the day at similar levels to yesterday. Mortgage rates for both refinance and purchase transactions remain near their recent lows as we await the Fed decision later today.
Investors and analyst appear to be focused on what the Fed has to say about the economy and future expectations; no one is expecting them to increase rates. Mortgage rates are not directly tied to the Fed however the Fed does influence the direction of the Mortgage Backed Securities (MBS) market which is where mortgage rates originate.
FED MEETING UPDATE:
It was a volatile afternoon for the bond market and the mortgage industry. At the beginning of the day it appeared the bond market and mortgage rates would be stable for the day; then came the ISM report which sparked a huge bond market rally (due to the report being much weaker than expected).
There was a lot of optimism heading into the Fed decision that if the market could hold or improve mortgage rates would follow. The first reaction to the Fed decision was a continuation of the rally that started just after the ISM report.
Then came Fed Chairman Jerome Powell’s press conference and everything changed.
The statement released by the Fed at 2pm was fairly bond friendly in terms of their statements about low inflation and their concerns about the economy. However at Fed Chairman Powell’s press we learned that the Fed is really more in a wait and see position right now rather looking for ways to stimulate the economy. Because of that bonds sold off and ended up essentially flat on the day.
Friday and the BLS Employment report. The big component to the jobs report (for mortgage rates) is the wage component. We’ll make sure to keep everyone updated with the latest information and current mortgage rates.
California Mortgage Rates (Conventional)
California FHA Mortgage Rates
California Jumbo Mortgage Rates
Mortgage Backed Securities and Treasury Snapshot:
Mortgage Backed Security FNMA 4.0 started the day at 102.64, and FNMA 3.5 was at 100.92. The 10y Treasury yield opened the day at the 2.50% level.
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Economic Data This Week:
Today we have the weekly Mortgage Market Index report, ADP Employment report, ISM Manufacturing PMI report and the FOMC rate decision. Thursday we have the ISM-New York Index and Factory Orders report. To finish off the week we have the BLS Employment report and ISM-Non Manufacturing report.
Mortgage Market Index:
This mornings report showed a continued decrease in both Refinance and Purchase applications. The Refinance index came in at 1228.3 (last weeks reading was at 1293.00) and the Purchase index came in at 259.4 (last weeks reading was 269.3).
The overall Mortgage Market Index came in at 407.2 (last weeks reading was at 425.6).
Expectations were for 180,000 jobs created and the reading came in at (last months reading was for 129,000 jobs created). The reading came in at 275,000 jobs created. A significant beat and a solid indication the economy continues to produces jobs. Post report bonds remained at similar levels and it appears the strong report will have no impact on mortgage rates.
The ADP Employment report does not have a wage component like the BLS Employment report.
ISM Manufacturing Report:
The ISM Manufacturing report came in below expectations. The reading came in at 52.80 and expectations were for a 55.00 reading. Prices paid came in way below expectations; 50.00 and expectations were for 55.1.
This is a bond/mortgage rate friendly report. Bond markets rallied post report and if the Fed comes out with a bond friendly statement this afternoon we may see improvements to mortgage rates over the next few days.
The Fed statement comes out at 2pm (EST); I’ll update the post after the statement comes out.
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.