Mortgage rates jump on speculation of a tax deal


It was in the middle of July when mortgage rates were at 4%.  Based on yesterday’s mortgage rate survey the benchmark 30 years mortgage jumped six basis points in week over week reporting and came in at 3.960%.  Most know rate movement is cyclical so the increase must be viewed  based on trends not as an isolated incident.

Industry experts attributed the jump to the increase of the yields on the 10-year Treasury bond, which jumped nearly 10 basis points.  The 10-year bond is the primary indices which affect movement on the 30-year mortgage.

 

The markets reacted based on anticipation that a tax deal may be accomplished?  Also, yesterday the Senate passed procedural regulations  known as a budget resolution making it a bit easier for a deal to be reached.   If things work out as projected, it would mark a key win for the Trump administration which has been bogged down since taking office by not being able to tout any legislative victories.

 

In the meantime, homeowners who are purchasing a property or attempting to refinance their existing mortgage are gauging rates to make sure their budgets are not negatively impacted.

Here is a snapshot of this week’s rates:

October 26, 2017

30-Yr FRM 15-Yr FRM 5/1-Yr ARM
Average Rates 3.94% 3.25% 3.21%
Fees & Points 0.5 0.5 0.4
Margin N/A N/A 2.74

The Freddie Mac rate survey is published every Thursday.  It is an industry standard and used to gauge mortgage movement.

Mortgage rates slip to lowest point of the year


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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.

The effect

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.

 

READ THE REPORT HERE

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?

Current rates

September 7, 2017 (based on Freddie Mac weekly rate survey)

30-Yr FRM 15-Yr FRM 5/1-Yr ARM
Average Rates 3.78% 3.08% 3.15%
Fees & Points 0.5 0.5 0.4
Margin N/A N/A 2.74