Mortgage rates headed slightly lower in the beginning of the week, while treasury prices gained, as a top U.S. central bank member reiterated the Fed’s view, that two more rate hikes are on the cards this year. Chicago Fed President Charles Evans said on Monday, that the U.S. central bank is on track to hike rates twice more this year, disappointing investors who had anticipated a faster pace of rate increases. Evans is one of the first central bankers, who addressed future monetary policy, following the Fed’s decision to raise the benchmark short-term interest rate by a quarter percentage point at the March FOMC meeting last week.
Since the rate hike, mortgage interest rate are on a downward trajectory. The reason behind this is that the market had clearly expected a more hawkish approach from the Fed regarding the pace of future rate hikes. Instead, the central bank issued a seemingly dovish statement and stuck to its outlook, calling for two more rate hikes this year. With that said, current mortgage rates remain historically low, which brings another golden opportunity for those who are looking to get a mortgage. The most prevalently quoted rate on the standard 30-year fixed conventional loan is currently 4.250% in the best scenarios, according to the latest mortgage market data.
In recent trading, pricing on long-dated treasury bonds strengthened. The yield on the 10-year treasury note, which is a bedrock of global finance, finished Monday’s trading session 3 basis points lower at 2.47%, compared to the yield on Friday. Lenders have passed along the recent gains, which is why current mortgage rates are lower than the ones seen last week. The longer-term, 30-year treasury bond closed yesterday’s trading session at a yield of 3.08%, which marks a 3 basis points slide.
Pricing on mortgage-backed securities (MBS), which lenders are monitoring to determine daily mortgage pricing, have started Tuesday morning slightly in the red. Tuesday is going to be silent in terms of top-tier economic data. On the other hand, several top U.S. policymakers are scheduled to speak later today, that will likely influence financial markets. The list of today’s Fed speakers include Kansas City Fed President Esther George, Cleveland Fed President Loretta Mester and Boston Fed President Eric Rosengren. It goes without saying, that investors will be watching these Fedspeaks closely for any clues about monetary policy.
The first piece of significant economic data, that could influence markets and eventually mortgage interest rates as well, will come out tomorrow, in the form of February’s existing home sales data. The consensus expectation is that sales of previously-owned homes likely declined to a seasonally adjusted annual rate of 5.55 million units in February from January’s 10-year high (5.69 million units).
On Thursday, February’s new home sales data is scheduled for release. Economists believe, that new home sales likely ticked up a seasonally adjusted annual rate of 590,000 units in February. Although, mortgage interest rates have started increasing late last year and home prices have been rising dramaticaly, that seemingly didn’t have a major effect on the housing market yet. Back in January, purchases of newly-built U.S. homes rose 3.7% to a seasonally adjusted annual rate of 555,000 units, according to the Commerce Department’s data. This marks a 5.5% increase in new home sales compared to data from a year earlier.
Less Americans applied for unemployment benefits in the week ended March 11, according to the Labor Department’s data. The number of U.S. jobless claims fell by 2,000 to a seasonally adjusted 241,000 in the said period. For the upcoming jobless claims data, which is set to come out on Thursday, labor market experts are estimating that first-time unemployment claims likely dropped by 2,000 to 239,000.
The Commerce Department will release a fresh reading on orders for U.S. manufactured durable goods on Friday. Orders for long-lasting goods likely edged up 1.3% in February, following a 1.8% increase a month earlier. When transportation orders taken out of the equation, orders estimated to have increased 0.7% in February.