Mortgage rates today edged up after New home sales, reported the Commerce Department, spiked to 610,000. That's up strongly from April'sÂ 569,000 units.Â That's nice for the housing sector and the economy, but less positive for mortgage interest 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||4.210||Unchanged|
|15 year fixed FHA||2.750||3.669||Unchanged|
|5 year ARM FHA||2.875||4.031||-0.03%|
|30 year fixed VA||3.375||3.531||Unchanged|
|15 year fixed VA||3.000||3.300||+0.12%|
|5 year ARM VA||3.250||3.335||-0.02%|
Indicators are a mixed bag, unlikely to change rates much.
Monday brings us May's Durable Goods Orders. This moderately-important report provides a snapshot of orders for big-ticket purchases. It's a decent gauge of economic health, because consumers and companies tend to place these orders only when they are comfortable with their income situations.
An increase over the previous month could cause rates to nudge upward, but probably not much. This data is already pretty old, and it would take an unexpectedly large jump to move the needle much.
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)