Today’s Mortgage Rates:
Mortgage rates for May 23, 2019 are improved heading into the three day holiday weekend. The biggest question seems to be; why are mortgage rates not lower as the 10y yield drops to new lows?
The simple answer is this: Mortgage rates are originated in the Mortgage Backed Securities market (not the Treasury market nor does the Fed set mortgage rates). The Mortgage Backed Securities market has rallied recently but not to the degree that we’ve seen in the Treasury market.
Heading into next week we’ll want to see the rally in the Treasury market hold (or improve) and if that happens you might eventually see the Mortgage Backed Securities market improve and mortgage rates would than improve.
Today the bond market will close early and won’t reopen until Tuesday. We hope everyone enjoys the three day weekend with family and friends but also remember those that have served and died to protect our country.
Mortgage Rates - Conforming Loans
Mortgage Rates - FHA Loans
Mortgage Rates - Jumbo Loans
Mortgage Backed Securities and Treasury Snapshot:
Mortgage Backed Security FNMA 3.5 started the day at 101.47 and the FNMA 4.0 coupon started the day at 102.94. The 10y Treasury yield opened the day at 2.31%.
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Economic Data This Week:
Today we have the Durable Goods report and the markets close early for Memorial Day.
Durable Goods Report:
Expectations were for -2.0% and the actual reading came in at -2.1%. Last months reading was +2.6%.
Economic Data Next Week:
There are no major economic reports being released on Monday and the bond markets are closed. On Tuesday we have the CaseShiller Home Prices and the Consumer Confidence report for May. On Wednesday we have the Mortgage Market Index and on Thursday we have the weekly Jobless Claims report and the preliminary Q1 GDP report. On Friday we have the PCE and the Core PCE report along with the Chicago PMI report and Consumer Inflation Expectations.
Mortgage Rates Next Week:
Next week could be an interesting week for mortgage rates. Three things could happen:
- Mortgage rates improve as the bond market continues to rally
- Mortgage rates remain stable as the bond market rally levels off
- Mortgage rates move higher as the bond market rally reverses course
These seem “obvious” and they are however it’s important to point out the “obvious” sometimes to better understand what might happen. For the bond rally to continue we’ll need to see one of three things happen (or possibly all three!): 1. Trade war gets worse 2. European economy continues to stall 3. US Economic reports disappoint investors.
With out one of (or possibly all three) of these things happening it’s unlikely we’ll see any improvement to mortgage rates next week. Generally speaking there is more risk to rates moving up considering the recent move down. When nearing multi-year lows, like we are now, it’s important to be cautiously optimistic and avoid the trap so many homeowners and homebuyers fall into. That trap is not moving forward with current rates even though it makes total sense in hopes you’ll get just a little more improvement.
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.
Loan Officer Kevin O’Connor:
Kevin grew up in California and works with clients throughout the state. From the initial quote to the application to the final closing; Kevin works directly with each and every homeowner and encourages his clients to ask questions so that they’re better informed. He updates koloans.com on daily basis and you can connect with him on social media: Twitter Rates01