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Posted 03/14/2017


Mortgage Rates Today, March 14, 2017, Plus Lock Recommendations

What's Driving Mortgage Rates Today?

Bad news for mortgage rates came this morning in the form of an unexpectedly high Producer's Price Index (PPI) reading for February. The measure of economic activity at the wholesale / manufacturing level increased by .3 percent last month, substantially higher than the .1 percent analysts expected.

More importantly, the index's core reading, which strips out volatile components like energy prices, also rose .3 percent. That's what's really pushing mortgage rates today.

Inflationary pressures at the wholesale end eventually make their way to the retail / consumer end. Expectations of inflation get priced into bond markets immediately, effectively pushing up interest rates.

Don't despair, however. Other indicators are offsetting the PPI. 

Oil prices are significantly down, which removes a lot of pressure. Ten-year bond yields are down one basis point. And CNNMoney's Fear & Greed Index has fallen precipitously from 64 (Greed) to Neutral at 51.

The Fed starts its two-day meeting today, and will let us know how much they will raise rates later tomorrow. Until then, mortgage rate movements are likely to be somewhat curtailed.

today's mortgage rates

** FHA APRs include government-mandated mortgage insurance premiums (MIP). 

These rates are averages, and your rate could be lower.

Request a personalized quote from a licensed, reputable lender here.


The Fed will wrap its meeting tomorrow and let us know what its intentions are. If they turn out to be surprising, rates could move later in the afternoon.

The morning will be busy as well, with several releases -- the Consumer Price Index, Retail Sales report, and Home Builders Index. If they continue to paint a picture of an improving economy and potential inflation, mortgage rates could move higher again. But if the message is mixed or indicators backpedal, rates could drop.

Rate Lock Recommendation

If you can't afford to gamble on mortgage interest rates, now is not the time to be floating your mortgage rate.


Note that this is what I would do if I had a mortgage in process today. Your own goals and tolerance for risk may differ. 

>>Ready to lock? Click here.<<

What Causes Rates To Rise And Fall?

Mortgage interest rates depend on a great deal on the expectations of investors. Good economic news tends to be bad for interest rates, because an active economy raises concerns about inflation. Inflation causes fixed-income investments like bonds to lose value, and that causes their yields (another way of saying interest rates) to increase.

For example, suppose that two years ago, you bought a $1,000 bond paying five percent interest ($50) each year. (This is called its “coupon rate.") That’s a pretty good rate today, so lots of investors want to buy it from you. You sell your $1,000 bond for $1,200.

When Rates Fall

The buyer gets the same $50 a year in interest that you were getting. However, because he paid more for the bond, his interest rate is not five percent.

  • Your interest rate: $50 annual interest / $1,000 = 5.0%
  • Your buyer’s interest rate: $50 annual interest / $1,200 = 4.2%

Your buyer gets an interest rate, or yield, of only 4.2 percent. And that’s why, when demand for bonds increases and bond prices go up, interest rates go down.

When Rates Rise

However, when the economy heats up, the potential for inflation makes bonds less appealing. With fewer people wanting to buy bonds, their prices decrease, and then interest rates go up.

Imagine that you have your $1,000 bond, but you can't sell it for $1,000, because unemployment has dropped and stock prices are soaring. You end up getting $700. The buyer gets the same $50 a year in interest, but the yield looks like this:

  • $50 annual interest / $700 = 7.1% The buyer’s interest rate is now slightly more than seven percent.
Click to see today's rates (Jul 25th, 2017)

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

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