There are no important economic reports due today, but there is a Treasury auction of 10-year Notes. If it goes well, rates could fall. If investors aren't interested, rates could rise.
Currently, yields on ten-year Treasuries have dropped three basis points (3/100th of one percent), That's good f mortgage rates. All three major stock indexes are down this morning (good for rates). Oil is up but below $47 a barrel, so I call that neutral. Gold is up -- an indicator of economic instability and good for mortgage rates.
CNNMoney's Fear & Greed IndexÂ has risen by 5 points from a neutral 50 to a greedy 55. That's something to keep an eye on, and not good for interest rates.Click to see today's rates (Jul 24th, 2017)
(As of 11:30 PDT)
|Conventional 15 yr Fixed||3.250||3.250||Unchanged|
|Conventional 5 yr ARM||3.125||3.723||Unchanged|
|30 year fixed FHA||3.375||4.341||-0.14%|
|15 year fixed FHA||2.875||3.760||-0.48%|
|5 year ARM FHA||3.000||3.991||+0.05%|
|30 year fixed VA||3.500||3.663||-0.25%|
|15 year fixed VA||3.000||3.307||Unchanged|
|5 year ARM VA||3.250||3.275||-1.0%|
Tomorrow should be another quiet day on the mortgage front. There are no economic reports expected, and just oneÂ Treasury auction. Here is how the rest Â the week will look:
Until Friday, this is a pretty light week, data-wise. if I have a rate I like, I'd be tempted to set it and forget it. But if you want to gamble on Friday's releases, you may do better. I'd look at Wednesday and Thursday Treasury auction results and see how prices went before deciding. Good auctions mean lower rates; bad auctions (no demand) mean higher rates.
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 payingÂ five percent interest ($50) each year. (This is called its â€ścoupon rate.") Thatâ€™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.
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.
TheÂ buyer gets an interest rate, or yield, of only 4.2 percent. And thatâ€™s why, when demand for bonds increases and bond prices go up, interest rates go down.
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 gettingÂ $700. The buyer gets the same $50 a year in interest, but the yield looks like this:
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2017 Conforming, FHA, & VA Loan Limits
Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)