Mortgage rates moved sideways on Thursday, as treasury bonds remained flat. Actually, the movement in the underlying bond market was so minor, that most lenders haven’t made noticeable adjustments their loan pricing. With that said, current mortgage rates are pretty much in line with those from the last couple of days. The only detectable difference can be seen in upfront costs instead of actual interest rates. Most lenders are still offering the 30-year fixed conventional mortgage at a rate of 4.000%, with some of the more agressive ones down to 3.875%.
In recent trading, the top-rated 10-year treasury bond closed at a yield of 2.15%, down 1 basis point compared to data from a day earlier. The bond market is a driving force behind interest rates. In essence, mortgage rates tend to trail behind the 10-year treasury note.. When the yield on the 10-year treasury decreases, interest rates are often trending lower as well. However, when the 10-year yield ticks up, mortgage rates usually rise as well. Yields on long-duration treasury bonds, such as the the 30-year note, slightly improved as well during Thursday’s trading session. The 30-year treasury bond closed yesterday’s trading day at a yield of 2.72%, falling from the previous 2.73%, according to the latest market data.
MBS pricing is slightly in the red this Friday morning, however we don’t anticipate a huge net change in today’s mortgage rates. In other words, there’s little reason to believe, that mortgage rates will move much today. This has been a pretty slow and uneventful week, with not too many influential economic headlines released. And as we have seen all week long, mortgage rates are moving mostly sideways, which is actually a good thing for borrowers on the fence, as current mortgage rates are hovering near 2017 lows.
Average mortgage rates are slightly lower across the country, according to Virginia-based housing giant, Freddie Mac’s latest weekly Primary Mortgage Market Survey (PMMS). The federal agency’s PMMS survey released Thursday, showed that lenders were offering standard 30-year fixed mortgages at a rate 3.90% in the week ended June 22. At the same time last year, the 30-year FRM was offered at a rate of 3.56%. The national average rate on the 15-year fixed loan, which is a popular option among homeowners seeking to refinance their existing mortgages, slipped to 3.17% this week, from the previous 3.18% it carried a week earlier. The rate on the 15-year FRM stood at 2.83% a year ago. The interest rate on the 5-year ARM was slightly down this week, as it came in at 3.14% versus 3.15% a week earlier, Freddie Mac reported. At this time a year earlier, the 5-year ARM was 2.74%.
While current mortgage rates remain very attractive, the odds of another rate hike this year is slowly climbing. According to the the much-watched CME FedWatch tool, which tracks the 30-day Fed Fund futures prices, market participants are now pricing in a 41.2% chance of a rate liftoff before the end of the year. That’s up 1.2% compared to data from the beginning of the week.
On the economic front, the Labor Department released the latest jobless claims figures Thursday, which showed, that initial claims for unemployment benefits rose by 3,000 to a seasonally adjusted 241,000 in the week ended June 17. This week’s tally marks the 120th straight week that claims are below the threshold 300,000 figure, which signals a fairly robust, healthy labor market.
Today’s economic calendar includes the release of fresh data on new home sales, as well as Markit manufacturing and service sector indexes. On top of that we will also get some more Fedspeak.
From a historical perspective current mortgage rates look very attractive, so if you are interested in getting a mortgage these days, this is certainly a good time to lock.