Mortgage rates today have not changed much from yesterday's levels, and there is little reason to believe that they will move much this week.
The Labor Department report 241,000 new claims for unemployment benefits last week. This is upÂ from the previous weekâ€™s, but nearly nailed the forecasts of 240,000. Since this is only a weekly checkup, itÂ won't affect pricing unless it diverges wildly from expectations.
Which it did not. Yawn.
The Conference Board reported its Leading Economic Indicators (LEI) today. We gotÂ a 0.3 percent increase, which matched forecasts.Â While a growing economyÂ isÂ not-great for mortgage rates, this increase is small, the report is not the most influential, and it matched expectations.
|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||4.211||+0.01%|
|15 year fixed FHA||2.750||3.669||Unchanged|
|5 year ARM FHA||3.000||4.057||-0.02%|
|30 year fixed VA||3.375||3.530||+0.01%|
|15 year fixed VA||2.875||3.181||-0.12%|
|5 year ARM VA||3.250||3.355||+0.01%|
All major indicators are pointing to increasing mortgage rates today.
This week brings several moderately important reports, and their results may change mortgage rates over the next few days. In general, reports that indicate the economy did better than expected drive rates up, and those that highlight economic softening push rates lower.
Mortgage rates todayÂ continue to move up and down within a very narrow range. Most indicators that are good for rates have been offset by others that are bad. There is nothing this morning signalling any change from this.
I would probably lock if rates were in my strike zone and I was closing soon. However, your own goals and tolerance for risk may vary. this is only what I would do.
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)