Melissa's Mortgage Minute
Where we stand today:
- 10 Year Bond at 1.69%
- Dow closed at 18,129.96
- The Euro is at $1.1152
- The Yen at 101.72
- Oil closed at $43.85/barrel
It is quite likely that we will close with different numbers tomorrow.
Bank of Japan is the most important for mortgage rates. If they stop buying long term bonds then the 10-year bond yield will go up and mortgage rates will follow. We broker out of the 1.55% range in August when the ECB didn't extend its bond buying. The 15 basis point rise in yields has led mortgage rates to increase by .125% to .25%.
Oh and then there is the Fed. Most don't expect a rate hike but anything goes. With the Fed markets will be watching the commentary so see if a rate hike this year will happen. Odds are 55% that they will. The average 30-year fixed has gone up to 3.625% with no points for a jumbo and 3.75% with 0 points for a conforming. Lower rates can be found if you shop carefully.
If bond yields spike higher tomorrow there are banks that will raise rates immediately. However, others especially portfolio lenders are slower to raise rates, but they will also go up if bonds go north of 1.75%. Buckle up folks!