Mortgage rates which have been sliding during the past several months reached their lowest point of 2017. As reported by the weekly Freddie Mac Primary Market Rate Survey, the benchmark 30-year mortgage dropped another four basis points in week over week reporting and came in at 3.780%
The dip was attributed to the 10-year treasury yield which also fell to new lows at 2.061%. Of all financial indicators which influence mortgage movement, it is the 10-year treasury yield which is the most predominant. At the beginning of the year there was much optimism that the Trump Administration could jumpstart economic growth and inflation by cutting taxes and regulations. However, with the administration not being able to claim any legislative victories investors are wondering whether they have the will to move the economy at a faster pace.
Rates are cyclical and will not always drop, however the recent national disaster of hurricane Harvey will have an effect in consumers applying and qualifying for mortgage. Low mortgage numbers are great but you still have to be able to qualify based on your credit and condition of the property being used as collateral. One of the first economic data points of Harvey was the BLS report reflecting unemployment claims. The report showed that claims jumped 62,000 from week over week reporting and came in at the highest level since 2015. That is worth mentioning as there as several more hurricanes, with equal or greater strength which is slated to hit the United States within the next several days.
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Based on Harvey and other pending hurricane’s which primarily affect regional economics, consumers can expect a broader impact resulting in rates remaining at their current level. The big question is with all that is going on, can consumers switch gears and be concerned about mortgage money?
September 7, 2017 (based on Freddie Mac weekly rate survey)
|30-Yr FRM||15-Yr FRM||5/1-Yr ARM|
|Fees & Points||0.5||0.5||0.4|