Current Mortgage Rates Roundup for March 13, 2017: What to Expect from the Week Ahead?

Mortgage rates were holding steady on Friday, following the release of a solid Non-Farm Payrolls report. Typically a strong jobs report hurts mortgage interest rates, but this wasn’t the case this time, as the market response was rather muted. Interest rates rose after Wednesday’s ADP data came out, but they managed to avoid moving higher following Friday’s big jobs report, as bond pricing improved. Still, current mortgage rates are hovering near the highest levels of the year. The latest mortgage information suggests, that the average lender is now quoting the standard 30-year fixed mortgage at a rate of 4.375%, while some of the aggressive loan providers are down to 4.25%.

Long-dated treasury bonds took a breather on Friday. The prospect of an imminent rise in the Fed’s benchmark interest rate have weighed on bond market sentiment last week. The yield on the 10-year treasury note, which is a bedrock of global finance, eased 2 basis points to finish the trading day at 2.58%. This marks the first time this month, that the 10-year treasury yield declined. As mortgage interest rates usually trail behind the 10-year treasury note, mortgage shoppers may notice a change in today’s mortgage rates compared to rates from a day earlier. Lenders were slow to pass along the gains on Friday, following the improvements on the bond market, but it’s worth to evaluate loan pricing this Monday. The longer-term 30-year treasury yield fell 3 basis points to 3.16% during Friday’s trading session, according to the latest market data.

today's mortgage rates march 13, 2017

Mortgage-backed securities (MBS) have started this Monday morning slightly in the red. The market will likely be in a wait-and-see mode until Wednesday when the Fed concludes its two-day meeting. The market is widely expecting a rate hike to take place this week. Currently, investors and traders are pricing in an 88.6% chance of a bump in the overnight lending rate at the upcoming FOMC meeting, according to the CME FedWatch tool, which tracks the 30-day Fed Fund futures prices. It looks like a rate hike is imminent and the market focus is now shifting to the next rate increase beyond March. With that said, investors will be closely watching the U.S. central bank this week, to see if there’s a shift in the Fed statement’s language.

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Looking at this week’s economic calendar, in terms of big ticket domestic events, the upcoming Fed meeting will dominate markets. This is an influential economic event that has the potential to move markets and impact mortgage rates as well. With regards to economic data, it’s going to be a busy week. Some of the key economic reports in the week ahead include fresh readings on retail sales, homebuilder confidence, housing starts and building permits, jobless claims, JOLTS and a couple of price indexes.

The February producer price index is set to be released on Tuesday. Overall, the producer price index shows the prices that businesses receive for their goods and services. Last month, the Labor Department said that January’s producer price index rose a seasonally adjusted 0.6%, which marks the largest gain in four years. According to the latest estimations, producer prices likely advanced 0.1% in February.

On Wednesday, the Labor Department will publish a fresh report on its headine inflation gauge. In January, the core consumer price index advanced 0.3% over the prior month. While consumer prices estimated to be flat in February, core inflation likely gained 0.2%.

The Commerce Department will release February’s retail sales figures on Wednesday morning, which will give us clues whether U.S. consumers boosted their spending last month. Retail sales rose 0.4% in January, exceeding economists’ forecasts. For February’s retail sales data the consensus expectation is a slight increase (0.2%). Core retail sales, which exclude auto and gasoline categories, likely advanced 0.1% last month, economists say.

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During the second half of the week some important housing industry reports are scheduled for release. The National Asssociation of Home Builders / Wells Fargo Housing Market Index for March is slated for release on Wednesday. Back in February, homebuilder confidence declined two points to 65, but outlook on home sales remained favorable. Any figure above 50 is considered positive, as more builders view sales conditions good than bad.

Thursday will see the release of February’s housing starts data. Economists believe the pace of residential starts likely increased 0.7% to a seasonally adjusted annual rate of 1.25 million units last month. Building permits, a proxy for future construction, likely reached 1.26 million units in February, according to the latest projections.

Fresh jobless claims data will provide us information about the current state of the labor market. The most recent data released by the Labor Department last week, showed that initial claims for unemployment benefits increased by 20,000 to a seasonally adjusted 243,000 in the week ended March 4. According to analysts, this week’s reading could show initial claims rising by 2,000 to 245,000.

The U.S. industrial production data for February will be released on Friday. Analysts believe that industrial production likely increased 0.2% last month, following a 0.3% slide a month earlier.

Current mortgage rates are holding firm, but the market is clearly expecting a rate increase at this week’s Fed meeting. A bump in rates would most likely boost borrowing costs across the country. In other words, if the Fed raises rates this week, mortgage interest rates will likely rise as well. With that said, borrowers, who are risk-averse should consider locking a rate before mortgage interest rates start rising.