Current mortgage rates are lower this weekend, as key treasury yields fell following the release of a mixed jobs report. A number of mortgage lenders improved their loan pricing on Friday morning, and although, the bond market gave back most of the gains later on in the afternoon, current mortgage rates look just as good as a week earlier.
While Friday’s big jobs report came in strong, the details of the report showed a more mixed picture, and markets reacted accordingly. The headline job growth figure in the January Employment Situation report was a strong one, as non-farm payrolls increased by 227,000 jobs last month, surpassing the consensus forecast of 175,000 jobs. However, investors and traders were focusing on the average hourly earnings component of the report, which is an indicator of wage growth. Average hourly earnings rose modestly by 0.1% in January, against expectations of a 0.3% increase. The unemployment rate ticked up to 4.8% from 4.7% a month earlier. All in all, while the headline job growth figure is a stellar one, slow wage growth painted a mixed picture about the latest NFP report. The slowdown in wage growth bolstered speculation among investors that the Fed will avoid raising rates too quickly.
In terms of influential economic data and events, the January jobs data was definitely the highlight of the week. Besides the release of the all-important NFP report, some Fedspeak was also on schedule on Friday, as two top Fed officials made public appearances and shared their views on monetary policy. In an interview on Bloomberg TV, San Francisco Fed chief John Williams said, that the U.S. central bank shouldn’t be „too timid” or „delay too long” raising rates. According to Williams, who isn’t a voting-member of the Fed’s policy-setting committee this year, three rate hikes in 2017 is a reasonable guess.
Chicago Fed President Charles Evans reiterated his support for a gradual rate at the Prairie State College Economic Breakfast on Friday. Evans, who is viewed as one of the more dovish members of the FOMC, added, that he could be comfortable with three rate increases this year. Right now, market participants are pricing in two rate hikes to take place this year, and they don’t expect a monetary tightening until summer.
Back on Wednesday, the Fed released its latest monetary policy statement, pointing to improved sentiment among consumers and businesses. As widely expected, the U.S. central bank’s policy-setting committee voted to leave the federal funds rate in the range of 0.5% to 0.75% at the recent FOMC meeting, which isn’t a surprise, given the uncertainty surrounding U.S. fiscal policy. The Fed remained cautious and offered no clues on the timing of the next rate hike, as U.S. central bank officials are waiting to see what policies the Trump administration will pursue.
Government-sponsored mortgage-finance company, Freddie Mac reported on Thursday, that 30-year mortgage rates remained flat nationwide in the week ended February 2, according to its latest weekly Primary Mortgage Market Survey (PMMS). The federal agency’s data showed, that on average lenders were offering 30-year fixed conventional loans at a rate of 4.19% in the past week, unchanged compared to data from a week earlier. The 15-year fixed mortgage averaged a rate of 3.41% last week, which marks a 1 basis point uptick since the prior week. Freddie Mac’s survey also revealed, that on average 5-year ARM loans were quoted at a rate of 3.23%, an increase of 3 basis points.
The upcoming week’s economic calendar is going to be light on meaningful data. The most influential domestic economic report is slated for release on Friday, in the form of the U.S. Michigan Consumer Sentiment for February. The preliminary reading on the aforementioned consumer sentiment index is expected to show a figure of 97.8, down from 98.5 last month.
The Job Openings and Labor Turnover Survey (JOLTS) for December is sheduled for release on Tuesday. The Labor Department’s report will show if more workers are voluntarily leaving their jobs in hope to find find another one. If the report turns out positive, it will signal that workers have more confidence in the job market. The most recent JOLTS report from November, showed that employers posted 5.522 million job openings, a slight increase from the downward revised tally of 5.451 million jobs in the prior month.
Other important economic reports scheduled for release in the week ahead includes fresh readings on international trade, jobless claims, as well as import prices
Besides the the list of upcoming economic data, we anticipate that news and headlines coming from the Trump administration will most likely continue impact markets in the week ahead, which eventually may effect mortgage rates as well.
Mortgage rates are moving in a tight range in the last few weeks, but longer-term trends are favoring a move towards higher interest rates. With that in mind, borrowers who are looking to get a new mortgage and want to avoid the possiblity of paying higher rates, may want to strike while the iron is hot.
A quick look at current mortgage rates at top U.S. loan providers, shows that rates are holding steady. At Charlotte-headquartered major lender, Bank of America (NYSE:BAC), the 30-year fixed home purchase loan carries a rate of 4.500%. The 15-year fixed counterpart can be secured for as low as 3.625%, the latest mortgage information revealed. Under BofA’s home refinance loan program, the 30-year FRM is quoted at a rate of 4.625%. Borrowers, who are interested in taking on the 15-year fixed rate refinance mortgage, can expect to pay 3.625% interest.
Over at Wells Fargo (NYSE:WFC), the 30-year fixed conventional home loan is up for grabs at a rate of 4.375%. A shorter-term alternative, the 15-year fixed home purchase mortgage has an asking rate of 3.625%. The lender’s standard mortgage refinancing options include the 30-year FRM, which can be locked in at a rate of 4.375%. Those looking to refinance an existing mortgage over 15 years with a fixed interest rate, can expect to pay 3.750% interest cost.
The above mentioned interest rates are subject to change and are not guaranteed. Click here to search for live mortgage rate quotes at some of the top U.S. lenders.