There is oneÂ economic report, one of modest importance, to affect mortgage rates today. And we'll only getÂ two reports of any importance all week. Global news, random Presidential tweets, and factors like those listed below will be driving mortgage rates.
Today's indicators are mixed. If a great rate is available now, however, you might want to "set it and forget it" today.
April factory orders fell by .2 percent, as expected. Falling orders relieve inflationary pressure, which is good. However, this was in line with expectations, so that decrease was already priced into mortgage rates. This morning's release will have little effect on rates.
(as of 10:30 am EDT)
|Conventional 30 yr Fixed||3.750||3.750||Unchanged|
|Conventional 15 yr Fixed||3.000||3.000||Unchanged|
|Conventional 5 yr ARM||3.000||3.629||Unchanged|
|30 year fixed FHA||3.250||4.191||Unchanged|
|15 year fixed FHA||2.750||3.605||-0.01%|
|5 year ARM FHA||2.750||3.925||Unchanged|
|30 year fixed VA||3.375||3.513||Unchanged|
|15 year fixed VA||2.875||3.181||Unchanged|
|5 year ARM VA||3.000||3.232||Unchanged|
We have a mixed bag of economic factors this morning. The attacks in London over the weekend don't seem to have affected US markets this morning.
Thursday: Weekly Unemployment claims -- how many people filed new claims for benefits. The report shows strength and weakness in the jobs market, which is very important, but it's only a weekly report, so it gets little attention unless the actual number of claims deviates crazily from estimates.
This week, analysts expect 238,000 claims.
Rates will probably move within a narrow range this week because of the dearth of economic reporting.Â Â If I could lock a rate I liked today, and I was closing soon, I'd probably do it.
If you're a gambler or can afford to wait for a better rate, you might choose to float. Everyone's goals and tolerance for risk are different.
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)