Mortgage rates for May 08, 2019 are somewhat stable as the chances of increased trade war tariffs is sparking a rally in the Treasury market. Unfortunately the Mortgage Backed Securities market has generally remained on the sideline as the 10y yield has moved lower. The good news is that mortgage rates remain near their recent lows for both refinance and purchase transactions.
FHA Mortgage Rates
Jumbo Mortgage Rates
Mortgage Backed Securities and Treasury Snapshot:
Mortgage Backed Security FNMA 4.0 started the day at 102.77, and FNMA 3.5 was at 101.19. The 10y Treasury yield opened the day at the 2.43% level. For those that are daily readers you’ll notice a sharp move down in the 10y yield recently however Mortgage Backed Securities and for the most part consumer mortgage rates have not followed. More on this below but the simple answer is the MBS market is taking a “wait and see” approach to the move lower in the 10y yield which sometimes happens when there is big rally in bonds.
The 10y Yield At 2.47% And What That Means For Mortgage Rates:
Yesterday I mentioned important levels to watch and shortly after that an important level was broken as the 10y Treasury rallied throughout the day. From yesterday’s post:
“Keeping an eye on important levels:
An important level for the 10y yield is 2.46%/2.47% and it’s no surprise we are seeing the market have difficulty moving below this. Mortgage Backed Securities investors will probably limit their buying of mortgage bonds until we see a sizable move lower in the 10y yield. Until that happens (and it may not) we’ll most likely see mortgage rates remain near current levels.”
As you can see the 10y yield has moved lower however the Mortgage Backed Securities market has barely improved which is why you are not seeing a sizable change in mortgage rates. If this stagnation continues today it might mean MBS investors are waiting to see if the treasury market can hold on to this rally before investing additional money into the Mortgage Backed Securities market.
How long will we have to wait?
Great question with no easy answers however I would guess if the 10y yield can hold this levels or improve from these levels the rest of the week we then might see new money being invested into the Mortgage Backed Securities market which would then improve mortgage rates. But the worst thing you can do is expect that to happen. If you are buying a home and waiting to lock your interest rate you should probably not hesitate and move forward with locking. There is no guarantees that bond markets will stabilize so that mortgage rates can improve.
Economic Data This Week:
Today we have the weekly Mortgage Market Index and a 10 year Note Auction. On Thursday we have the Core Producer Prices report and a 30 year Bond Auction. On Friday we have the CPI report (important for mortgage rates).
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.