The Producer Price Index (PPI) for August came out this morning. It affect on mortgage rates today is not huge, but the numbers did come in favorably for interest rates.Â This index measures inflation at the manufacturing level, and a lower-than-expected reading could push ratesÂ lower.
Analysts expected that the index would increase by .3 percent, but only go .2 percent. That means less to create fears of inflation, which should be good for rates.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||3.000||3.000||Unchanged|
|Conventional 5 yr ARM||3.125||3.659||-0.01%|
|30 year fixed FHA||3.250||4.195||+0.01%|
|15 year fixed FHA||2.750||3.678||+0.02%|
|5 year ARM FHA||3.000||4.123||+0.01%|
|30 year fixed VA||3.375||3.531||+0.01%|
|15 year fixed VA||3.000||3.266||-0.01%|
|5 year ARM VA||3.250||3.411||+0.01%|
Today's data are mostly neutral for rates. You may notice that sometimes, factors contradict each other. They may offset, or stronger indicators may dominate. For instance, it would not matter what the stock market did if we declared war. That one factor would overwhelm all others when influencing mortgage rates.
Mortgage rates todayÂ are still very favorable for home buyers. The climate is highly-encouraging for real estate purchases.
We'll get more economic data this week than we did last week, but nothing until Wednesday. here's the schedule:
Mortgage rates are still low this morning, and I believe that there is more room to move up than down. I'd feel comfortable lockingÂ 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)