Mortgage rates todayÂ took their cues from several reports.Â Case-Shiller reported that home pricesÂ for JulyÂ came in higher than expected with a 5.9 percent increase in July. This would tend to push rates higher, but keep in mind theÂ information isÂ nearly two months old, so it's less influential than the other two releases.
The Consumer ConfidenceÂ Index for September dipped to 119.8 from August's levels, largely due to substantial drops in hurricane country after this month's storms.Â However, analysts had predicted 119.5, so the release had little effect.
Finally,Â New Home Sales dived unexpectedly, which was very good for rates. It's not the fact that they were much lower in August; it's the fact that the actual numbers caught economists completely off-guard. They had predicted a strong increase of 3.3 percent, and what they got was an even strongerÂ decrease of 3.4 percent. That gave markets whiplash this morning.Click to see today's rates (Oct 22nd, 2017)
|Conventional 30 yr Fixed||3.750||3.750||Unchanged|
|Conventional 15 yr Fixed||3.000||3.000||Unchanged|
|Conventional 5 yr ARM||3.250||3.703||Unchanged|
|30 year fixed FHA||3.250||4.214||-0.01%|
|15 year fixed FHA||2.875||3.780||-0.01%|
|5 year ARM FHA||3.250||4.203||Unchanged|
|30 year fixed VA||3.500||3.648||-0.01%|
|15 year fixed VA||3.125||3.407||Unchanged|
|5 year ARM VA||3.375||3.457||-0.04%|
This morning's data are mixed but point toward falling rates.
Mortgage rates todayÂ are still very favorable for home buyers. The climate is highly-encouraging for real estate purchases.
This week contains plenty of action and lots of reporting. If you have a mortgage in process and have not locked an interest rate, pay close attention to economic reports, and stay in contact with your lender.
Given the political instability we've been seeing lately, mortgage rates could do anything. They tend to fall when there is a lot of economic uncertainty. That said, the numbers have been supporting higher interest rates lately -- higher stocks, in general, lower gold, higher oil, higher Treasuries, and a "Greedy" outlook all point to a trend of higher rates.
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 (Oct 22nd, 2017)
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
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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)