Mortgage rates today may be pretty volatile, bouncing around as news comes in. This morning, things are pretty quiet in advance of the Fed's post-meeting announcements. The release covers the Fed'sÂ economic projections, including itsÂ rate hike projection.
However, we also have a couple of reports and the regular data listed below the rates chart.
May's Retail Sales report measuresÂ consumer spending. Experts predicted aÂ 0.1 percent increase last month, but we actually got a .3 percent reduction -- good for rates.
May's Consumer Price Index (CPI). Analysts expect the overall reading to be unchanged with the core reading up 0.2 percent.Â We got a .1 percent drop -- also good for rates.
|Conventional 30 yr Fixed||3.750||3.750||Unchanged|
|Conventional 15 yr Fixed||3.125||3.125||Unchanged|
|Conventional 5 yr ARM||3.125||3.678||Unchanged|
|30 year fixed FHA||3.250||4.197||-0.02%|
|15 year fixed FHA||2.750||3.659||-0.02%|
|5 year ARM FHA||3.000||4.061||+0.05%|
|30 year fixed VA||3.375||3.520||-0.02%|
|15 year fixed VA||2.875||3.181||Unchanged|
|5 year ARM VA||3.250||3.340||-0.01%|
As of 10:30 EDT
Indicators are mixed, which probably caused most rates to be unchanged.Â This may change after the Fed's announcement.
Unlike last week, this week will be extremely busy. There are six pieces of economic data that are relevant to mortgage rates along with a couple of Treasury auctions.
What will happen to mortgage rates today is anyone's guess. It depends on the Fed's post-meeting projections. Analysts expect a rate hike form this meeting, but how many will follow is what enquiring minds want to know. I'd probablyÂ float and see what happens, unless I could not withstand an increase. In that case, I'd lock now.
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)