Mortgage Rates Continue To Rise This Week
Mortgage Rates Continue To Rise this week. This past week was one of the worst weeks in recent times for mortgage rates. Mortgage rates continue to rise because Mortgage Backed Securities, also referred to a MBS, has sustained one of the worst hits in recent weeks where it affects mortgage rates. Due to the sell off of Mortgage Backed Securities, mortgage rates continue to rise to the highest level since October of 2014. On the flip side, they are still trading at 0.25% lower than a year ago today and even though mortgage rates continue to rise for the past several weeks, it did not affect the volume of mortgage loan applications submitted by mortgage lenders. The shortage of inventory of housing nationwide and the rise in rents nationwide has created a demand for home buyers. To top off the home purchase market is the lowered annual FHA mortgage insurance premium of 0.85% and many more mortgage lenders relaxing their mortgage lender overlays on both FHA Loans and Conventional Loans.
Mortgage Backed Securities
Mortgage Backed Securites are bonds that trade on the secondary market. They fluctuate on pricing and when they do, it affects mortgage rates. Mortgage Backed Securities has dropped 160 basis points which the outcome on mortgage rates that it pushed mortgage rates past the 4.0% border for most mortgage loan borrowers. Mortgage rates this week ended with mortgage rates at most major banks at 4.25% on 30 year fixed mortgage rates and the annual percentage rates north of 4.5%.
Where Are Mortgage Rates Heading And Why A Sudden Jump In Rates?
Good news for the economy means that it is bad for mortgage rates. Bad news in the economy is good for mortgage rates. Main reason why mortgage rates continue to rise is because this week brought good economic news in both the United States and overseas that showed the overall economy is healthy and things are improving not just in the United States but globally as well. Again, great news for the economy means it is bad for mortgage rates and the likelihood for mortgage rates increasing is more than likely.
Good Economic News
Stronger than expected numbers came up on manufacturing numbers and construction reports this past week. Employment numbers also came out than predicted by economists and industry experts. The United States economy has added over 280,000 new jobs in the month of May which was much higher than economists expected. Hourly average earnings for U.S. workers came out 2.3% higher than the same time one year ago which was much better than expected. The economic job gains date and the wage growth numbers came out much better than expected for inflations which opened the eyes of the Federal Reserve Board to use this as a trigger to start raising interest rates like they were expecting to.
The Future Of Mortgage Rates
Nobody has a crystal ball where mortgage rates are headed but most industry experts warn that mortgage rates will experience extreme volatility in the coming days, weeks, and months before it stabilizes. Will mortgage rates continue to rise? Most experts believe so and most recommend that you lock your mortgage rates today.
Should I Wait For Mortgage Rates To Drop?
By all signs the way the market is, it looks like a repeat of May 2013 where mortgage rates spiked up and never returned to the lower levels it was. Millions of homeowners who had refinance mortgages in the pipeline never had a chance to refinance due to not locking their mortgage loans. If you are in the process of refinancing and have not locked your mortgage rates as of today, I strongly recommend that you lock your rates as soon as possible. Mortgage rates are still at historical lows and are 0.25% lower today than it was the same time one year ago.