Not much in terms of data this morning. We did get the Weekly Jobless Claims report from the Labor Department. Â experts predicted 243,000 new claims for benefits, and we got 244,000 claims -- almost exactly as expected, so this won't move mortgage rates much.
However, the factors listed below are definitely spiking mortgage rates today.
(As of 10:00 am EDT)
|Conventional 30 yr Fixed||3.750||3.750||Unchanged|
|Conventional 15 yr Fixed||3.125||3.125||Unchanged|
|Conventional 5 yr ARM||3.250||3.722||+0.04%|
|30 year fixed FHA||3.250||4.225||+0.01%|
|15 year fixed FHA||2.750||3.694||+0.02%|
|5 year ARM FHA||3.000||4.061||Unchanged|
|30 year fixed VA||3.500||3.633||Unchanged|
|15 year fixed VA||3.125||3.407||+0.1%|
|5 year ARM VA||3.375||3.398||+0.04%|
IndicatorsÂ this morning point to increasing rates. Some of these indicators moved sharply, and we may see rates finally break out of the normal band they'd been occupying for the last two weeks.
This week will be a busy one as the month and quarter close out.
Mortgage rates appear to be heading up.
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)