Guest Post – Tradition Mortgage’s Weekly Update September 14, 2015
It’s Showtime for the Fed
Investors remain almost evenly divided about whether the Fed will raise the federal funds rate on Thursday. Fed officials have stated that policy decisions will be determined by the performance of the economy, but recent comments reveal mixed views on whether the conditions for a rate hike have been met. The uncertainty about the outcome makes it likely that Thursday’s Fed statement and press conference will cause a large market reaction.
The question comes down to whether or not the current mortgage rates already have the Fed rate hike priced in? If the Fed hikes, we may see a sudden uptick in mortgage rates at that moment, but by the end of day, the net result may only a slight increase. It is safe to say that we won’t be seeing rates much lower than today’s rate sheets. Could be a very good time to lock in your rate now!
In other economic news, the unemployment rate declined to a multi-year lows. Additional labor market data released on Wednesday contained more good news for the economy. The JOLTS report indicated that job openings in July jumped to the highest level since the data collection began in 2000.
Factors: The highly anticipated Fed statement and press conference will take place on Thursday. With investors divided about the outcome, it likely will be a volatile session. Before that, Retail Sales will be released on Tuesday. Retail Sales account for about 70% of economic activity. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Wednesday. CPI looks at the price change for finished goods which are sold to consumers. Housing Starts will be released on Thursday.
Trend: Slightly Higher
Today’s rate snapshot: 30-day lock rates as of 9/8/2015 08:35AM:
30-year Fixed (conforming): 3.875% (3.99%APR*) same as last week
15-year fixed (conforming): 3.125% (3.25% APR*) same as last week
7-year ARM (conforming) 3.25% (3.375% APR*) –.125% lower from last week
30-year Fixed (jumbo) 3.75% (3.875% APR**) –.125% lower from last week
*Based on 70% LTV, primary residence, rate and term refinance and purchase, 175k minimum loan size, 30-day lock. Rates subject to change at any time based on bond market pricing fluctuations. **Minimum loan size for a jumbo loan is $418,000. This information is intended for professional reference only, and not intended for consumer use. Additional qualifications and disclosures apply.
Have a great week!
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Tradition Mortgage LLC
NMLS # 286998
4350 Baker Rd Suite 190 / Minnetonka, MN 55343 / www.TraditionWest.com