Mortgage rates today remained low after yesterday afternoon's release of theÂ "Beige Book," a book of notes about the economy that the Federal Open Market Committee uses when deciding about rate increases.
Despite concerning weakness in the auto industry, the overall economy continued to grow at a â€śmodest to moderateâ€ť pace, and with little sign of inflation.Â This is good for mortgage rates.
In addition, this morning's weekly unemployment numbers came in much higher than expected, with 298,000 new claims for benefits filed. Analysts had expected just 242,000.
Normally, the weekly report doesn't get people that excited, but this one came when there were no other reports and varied so much from expectations that it did push rates lower.Click to see today's rates (Sep 23rd, 2017)
(As of 10:30 am EDT)
|Conventional 30 yr Fixed||3.625||3.625||Unchanged|
|Conventional 15 yr Fixed||2.875||2.875||Unchanged|
|Conventional 5 yr ARM||3.125||3.666||Unchanged|
|30 year fixed FHA||3.250||4.180||Unchanged|
|15 year fixed FHA||2.750||3.632||+0.01%|
|5 year ARM FHA||3.000||4.099||Unchanged|
|30 year fixed VA||3.250||3.419||Unchanged|
|15 year fixed VA||2.875||3.175||+0.01%|
|5 year ARM VA||3.250||3.389||+0.01%|
Today's rates started low, but data points mostly to increasing rates.
Mortgage rates todayÂ are still very favorable for home buyers. The climate is highly-encouraging for real estate purchases.
The week was very light on data, and tomorrow is no exception. There are no pertinent reports scheduled for release on Friday. So gaze into your morning teacup, call your psychic hotline, or get up at 3:00 am to catch the latest Presidential tweet if you want clues about mortgage rates -- or just read this daily piece.
Mortgage rates are low this morning but data indicate that they could go higher today. As low as they are, I'd probably lock if I had a loan closing soon.
Here's the recommendation:
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:
The buyerâ€™s interest rate is now slightly more than seven percent.Click to see today's rates (Sep 23rd, 2017)
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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)