Mortgage rates are in a holding pattern this Tuesday morning, ahead of February’s PMI Manufacturing Survey and public appearances from several top Fed members. It’s going to be a relatively quiet week in terms of influential domestic economic data. While volatility will continue to impact markets and mortgage rates, we don’t anticipate a big net change in rates this week. Still, the days ahead will see the release of some important housing market data, the release of the Minutes from the Fed’s February meeting, as well as fresh consumer sentiment and jobless claims data. Moreover, some top U.S. central bank officials will take the stage starting today and will share their views on monetary policy.
Pricing on mortgage-backed securities (MBS), which lenders use to determine daily mortgage rates, is slightly in the red this Tuesday morning. If MBS pricing remains in negative territory, there’s a possibility that lenders will change today’s mortgage pricing for the worse.
Speaking at a conference in Singapore on Monday, Cleveland Fed chief Loretta Mester said, that she would be comfortable raising rates at this point if the economy stays on track. She added, that „We did have a temporary oil price shock which held down inflation, we had the dollar appreciation which held down inflation. Those have passed through and the trend in inflation is, it’s moving up. So I’m comfortable that inflation is near its goal and moving toward its goal… I’d be comfortable with an increase in the (federal) funds rate at this point, if the economy keeps going the way it’s going.”
Market participants will turn their attention to Fedspeak today, as Minneapolis Fed chief Neel Kashkari, Philadelphia Fed President Patrick Harker and San Francisco Fed President John Williams are all scheduled to speak. Investors and traders will be looking for any clues from these U.S. policymakers on the prospects of when the next rate hike will come. The next FOMC meeting will take place in March, and currently the market is pricing in a 22.1% probability of a rate hike next month, up from 17.7% on Monday.
30-year and 15-year fixed mortgage rates are lower across the country, according to Freddie Mac’s weekly market survey. According to the Virgnia-based mortgage-finance company’s latest PMMS survey, the average rate on the standard 30-year fixed mortgage dropped to 4.15% in the week ended February 16. That’s 2 basis points lower compared to data from a week earlier. On average, mortgage lenders were offering 15-year fixed conventional mortgages at a rate of 3.35% last week, which marks a 4 basis points slide compared to the previous 3.39% in the prior week. The federal agency’s latest survey also showed, that the average interest rate on the flexible 5-year ARM eased 3 basis points to 3.18% last week.
UPDATE: One piece of domestic economic data got released today, in the form of February’s PMI Manufacturing Index. The flash reading on Markit’s U.S. manufacturing purchasing managers’ index showed, that manufacturing activity dropped to a seasonally adjusted 54.3 last month from 55 in January. Also, business activity in the U.S. services sector declined in February, as the flash services purchasing managers’ index came in at 53.9, falling from a 14-month high of 55.6 a month earlier.
Current mortgage rates at major U.S. lenders are holding steady, according to the latest mortgae information. At Wells Fargo (NYSE:WFC), the 30-year fixed home purchase loan is offered at a rate of 4.375%. The lenders 15-year fixed home mortgage can be secured for as low as 3.500%. Borrowers looking to refinance an existing mortgage through 30-years, will see the 30-year fixed mortgage loan being offered at a rate of 4.375%. The 15-year fixed home refinance loan is carrying 3.625% in interest, today’s mortgage rate data showed.
Over at Chase (NYSE:JPM), the 30-year fixed mortgage for home purchase is available at a rate of 4.125%. The 15-year fixed counterpart is on the books at a rate of 3.375%. As far as home refinancing options are concerned, the long-term 30-year fixed refinance loan is coming out at a rate of 4.125%. A shorter-term fixed-rate option, the 15-year FRM can be locked in at a rate of 3.375%.
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.