Current Mortgage Rates Roundup for March 6, 2017: What to Expect from the Week Ahead?

Mortgage rates spent the past week in higher territories, following hawkish comments from several Fed officials, that a short-term rate hike could be on the table at the next FOMC meeting in March. U.S. government bonds were mixed on Friday, as Fed Chairwoman Janet Yellen suggested that a rate increase would „likely be appropriate” at the next Fed meeting, if the economy evolves in line with the U.S. central bank’s expectations. Several other Fed officials painted an upbeat picture about the U.S. economy last week, bolstering speculation that an interest rate hike could come as soon as March. With that said, the most prevalently quoted rate on the 30-year fixed mortgage remains at 4.25%, according to the latest mortgage information.

In the secondary market, the 10-year treasury note, which is a bedrock of global finance, closed Friday’s trading day at a yield of 2.49%, unchanged since Thursday. The yield on the 2-year treasury note, which is the most sensitive to rate hike expectations, remained intact at 2.32%. On the other hand, the longer-term, 30-year treasury note finished the trading session at a yield of 3.08%, down 1 basis point compared to data from a day earlier.

today's mortgage rates march 6, 2017

Pricing on mortgage-backed-securities (MBS), which most directly influence mortgage rate movement, is slightly on the red on Monday morning. While mortgage rates may move up or down in the next couple of days, we don’t anticipate big net changes in interest rates until Friday, when the latest monthly non-farm payrolls report will be released. A stronger-than-expected NFP report would definitely put an upward pressure on mortgage rates. On the other hand, a weak jobs report would most likely send mortgage interest rates lower.

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National mortgage rates are on a downward trajectory, according to Freddie Mac’s latest weekly Primary Mortgage Market Survey (PMMS) released Thursday. The federal agency’s mortgage data revealed, that on average, lenders were offering 30-year fixed conventional loans at a rate of 4.10% in the week ended March 2, down 6 basis points from a week earlier. The shorter, 15-year fixed mortgage carried a lower rate last week, in the form of 3.32%, the government-sponsored enterprise’s data showed. This marks a 5 basis points downtick compared to data in the prior week. As far as the 5-year adjustable rate mortgage is concerned, the average interest rate declined 2 basis points to 3.14% last week, Freddie Mac reported. However, it’s important to note that Freddie Mac’s survey collects responses from lenders in the early part of each week, therefore it doesn’t take into account those economic headlines and events that happen in the later part of the week, that has the potential to impact mortgage rate movement.

The week ahead will be particularly light on influential economic data, except February’s big non-farm payrolls report due Friday, which definitely captures the spotlight this week. It looks like that a rate hike has been baked into markets now and only a very weak NFP report could force the Fed to postpone raising rates. The consensus expectation is that the economy likely added 190,000 jobs in February, following an increase of 227,000 jobs a month earlier. Also, unemployment rate is projected to decline by 0.1% to 4.7%, while average hourly earnings are expected to increase 0.3%, after a 0.1% gain in January. The outcome of the upcoming non-farm payrolls report will likely influence market expectations about the pace of future rate hikes.

The list of other domestic economic reports slated for release this week include fresh readings on factory orders, ADP private sector employment, weekly jobless claims and import prices. Also, Minnesota Fed head Neel Kashkari is scheduled to speak later today. The Fedspeak will be watched closely by investors and traders for more clues on interest rate policy.

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Recent comments from top Fed policymakers, including New York Fed chief William Dudley and San Francisco Fed head John Williams, increased the chances of a rate hike this month in the eyes of investors and traders. Currently, the market is pricing a 86.4% odds for a rate hike at the next FOMC meeting, according to the CME Group’s FedWatch tool. That’s up 6.7% from the previous 79.7% probability on Friday. Chances of a monetary tightening were as low as 35% a week earlier. The central bank’s policy-setting committee will hold its next two-day meeting on March 14 and 15.

Currently, mortgage interest rates are holding steady, however, a strong NFP report on Friday could cement the likelihood of a rate hike in March. And when the rate hike happens, mortgage interest rates are expected to increase as well. With that in mind, borrowers looking to get a mortgage, may want to lock a rate sooner rather than later.