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Daily updates on interest rates
Interest Rate
6.125%
APR
6.697%
Points
1.000
Last Updated
16 May 2024
Interest Rate
6.875%
APR
7.012%
Points
1.375
Last Updated
16 May 2024
Interest Rate
7.250%
APR
7.332%
Points
0.605
Last Updated
16 May 2024
Interest Rate
6.00%
APR
6.346%
Points
1.250
Last Updated
16 May 2024
Interest Rate
6.000%
APR
6.322%
Points
0.827
Last Updated
16 May 2024
Interest Rate
6.750%
APR
7.654%
Points
1.500
Last Updated
16 May 2024
Interest Rate
6.625%
APR
6.760%
Points
1.125
Last Updated
16 May 2024
Interest Rate
6.500%
APR
6.690%
Points
1.032
Last Updated
16 May 2024
Interest Rate
6.875%
APR
7.007%
Points
0.917
Last Updated
16 May 2024
Interest Rate
6.875%
APR
7.098%
Points
1.375
Last Updated
16 May 2024
Interest Rate
6.625%
APR
6.795%
Points
0.861
Last Updated
16 May 2024
Interest Rate
6.625%
APR
6.760%
Points
1.125
Last Updated
16 May 2024
Interest Rate
7.3%
APR
0.424%
Points
7.4
Last Updated
12 Apr 2024
Interest Rate
6.250%
APR
6.469%
Points
0.967
Last Updated
16 May 2024
Interest Rate
8.750%
APR
8.609%
Points
1.011
Last Updated
16 May 2024
Interest Rate
6.750%
APR
7.502%
Points
0.715
Last Updated
16 May 2024
16 May 2024
Yesterday’s Consumer Price Index (CPI) data came in exactly where expected. With all the bad news lately on the inflation front the market took this as favorable and bond prices were up. Yields which are the same as interest rates move in the opposite direction of prices, so interest rates modestly yesterday (to keep things in perspective we’re talking about less than an eighth of one percent).
The CPI showed a month-over-month increase of 0.3% at the core level. This is still almost twice the .17% needed to meet the FED’s 2% annual inflation target. Nonetheless the stability in prices is reassuring, especially after the recent volatility.
What’s more, Retail Sales figures, which can influence housing market trends, came in lower than expected, with a negligible 0.0% change compared to the forecasted 0.4%. Even last month’s impressive 0.7% reading was revised down slightly to 0.6%. This unexpected dip in retail activity has led to a positive response from bond traders.
By yesterday afternoon, bond yields had reached levels reminiscent of those before the April 10th CPI data release. It’s almost as if the recent market fluctuations never occurred.
Today is back to more technical trading without big news and bond prices are flat to down, so you won’t be seeing any improvement in rates as today goes on.
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15 May 2024
Good news for homebuyers: the bond market rallied after the latest Consumer Price Index (CPI) data was released. CPI data came in “as expected” so don’t expect any drastic improvement in rates yet, but it’s better than the alternative! We knew today would be a volatile day, but so far the trend is toward a rally in bond prices, and the yield (i.e. the rate) moves in the opposite direction of the yield thus today’s mortgages rates might be slightly better than yesterdays. The weaker retail sales data also contributed to this positive trend. Remember, if you’re worried about mortgage rates you want a weaker economy.
With 10-year Treasury yields down nearly 0.08% as of 9 AM, this is turning out to be one of the least volatile reactions to the CPI data we’ve seen. This stability is good news if you’re considering buying a home or refinancing, as it means lower borrowing costs and more predictable mortgage rates. It’ll take new reports showing a more significant drop in inflation and overall weakening of the economy before the FED is likely to act and move towards rate reductions, but we’ll take this small win today.
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14 May 2024
If you’re thinking about buying a home and keeping an eye on mortgage rates, today’s news about the Producer Price Index (PPI) is worth noting. While the PPI isn’t as influential as the Consumer Price Index (CPI), it still made waves this morning. The monthly core number came in much higher than expected, causing an immediate reaction in the bond market. This sent bond prices down and yields up (yield is the same as rate),
Here’s what happened: 10-year Treasury yields jumped by 0.05%, and Mortgage-Backed Securities (MBS) dropped slightly. However, within 15 minutes, everything stabilized and returned to near previous levels. This volatility was due to revisions in the previous month’s data offsetting the big miss, along with variations in some internal components. Notably, several components that impact the Personal Consumption Expenditures (PCE) index, which the Federal Reserve closely watches, were weaker.
For homebuyers, this means mortgage rates might experience some fluctuations, but the immediate impact may not be as significant as it first appeared. The big news is tomorrow when the Consumer Price Index report is released. If this shows that inflation is rampant then mortgage rates will likely go up. If inflation is under control then mortgage rates will likely drop based the the expectation that the Fed will start to ease up and even reduce the Fed funds rate in the fall. Check back tomorrow! If you’re nervous you may want to lock your rate today, while others will want to wait and hope that the report is favorable for mortgage rates.
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13 May 2024
Big Week Ahead: Keep an Eye on CPI and Retail Sales!
This week’s reports could have big implications for mortgage rates. On Wednesday, there are two key reports you’ll want to pay attention to: Core CPI and Retail Sales.
Now, what’s Core CPI? It’s basically a measure of how prices are changing for goods and services, excluding food and energy. Why does it matter? Well, it can affect mortgage rates, which in turn can impact your home buying journey.
In the past year or so, Core CPI has been stealing the spotlight in the bond market. Traders are really tuned into it, often waiting for its release before making any big moves. If the numbers come in higher or lower than expected, it can shake things up.
For instance, back in April, Core CPI made a big splash in the market, causing some ripples in mortgage rates. And let’s not forget about Retail Sales – they play a part too. Strong retail numbers can add fuel to the fire, influencing mortgage rates even further.
Remember, high inflation and a hot economy = higher rates. A slowing economy and little or no inflation means we will be seeing lower interest rates.
So, what’s the takeaway for you? Well, if you’re in the market for a home, keep your eyes peeled this Wednesday. These reports could give you some insight into where mortgage rates might be headed. And remember, knowledge is power when it comes to making the right move for your dream home.
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09 May 2024
In terms of economic data, this week is pretty quiet (brace yourself for the CPI Report on May 15th), but there are a few reports we always keep an eye on, especially for homebuyers like you. One of those reports is the initial jobless claims data released every Thursday. It doesn’t usually shake up the bond market too much, so even though the number of new jobless claims came in higher than expected the bond market (and in turn mortgage rates) is pretty stable…we’ve been watching throughout the day and things got a little better this afternoon but by this time in the afternoon you aren’t likely to see any noticeable change in today’s rates. Unless something changes tomorrow morning you may see slightly better pricing on Friday. Overall, it’s not a game-changer, but it’s a positive note to start the day on, especially for those locking in an interest rate in the next few days.
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08 May 2024
The Treasury will auction $42 billion in new ten year note this afternoon. As a homebuyer worried about interest rates, and absent any other big economic news, this means that rates are unlikely to be better today than yesterday, and could be slightly worse. Getting ready for an afternoon Treasury auction, there’s often a trend where interest rates tick up slightly. This happens because traders tend to sell off some bonds before the auction, which drives rates higher. While this isn’t a guaranteed pattern every time, it’s a common enough occurrence. The logic behind it is straightforward: with a large amount of bonds up for auction, there’s less demand in the market beforehand, which pushes prices down and yields up (yield is synonymous with rates).
The real action will be with the May 15th Consumer Price Index Report. Until then these changes are pretty minor. Currently an 1/8 (0.125 in decimal form) change in mortgage rate on a 30 year fixed translates to about an upfront cost of about 3/8 (0.375) in points (sometimes a 1/2 point). So when we say rates are up slightly, in a lot of cases with minor movements the interest rate is the same as the day before, but maybe you have to pay an extra 0.125 in points to get that rate. For example, on a $400,000 loan that would be a cost of $500.
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10 Apr 2024
If you’re in the market to buy a home, you’ve likely come across the term “CPI” and heard how it can affect mortgage interest rates. But what exactly is CPI, and why does it matter to you as a homebuyer? Let’s break it down into simple terms.
CPI stands for the Consumer Price Index. Think of it as a thermometer measuring the health of the economy by tracking the cost of a basket of goods and services that typical consumers buy, such as groceries, clothes, and medical services. The CPI report, released monthly by the Bureau of Labor Statistics, shows whether this basket’s cost has gone up or down, essentially measuring inflation or deflation.
The CPI is a crucial indicator for both the economy’s health and the direction of mortgage interest rates. Here’s why:
Mortgage rates don’t directly follow the CPI, but they are influenced by the actions the Federal Reserve takes in response to CPI data. Here’s how:
As a homebuyer, understanding CPI and its impact on mortgage rates can help you make informed decisions:
While CPI is just one of many factors affecting mortgage rates, it’s a critical one that provides valuable insights into economic trends. By understanding CPI, you can better anticipate changes in mortgage rates and plan your home purchase with more confidence. Remember, a well-informed homebuyer is a smart homebuyer.
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09 Apr 2024
Deciding Whether to Lock in Your Mortgage Rate? Here’s What You Need to Know
“Should I lock in my mortgage rate now or wait?” It’s the question on every homebuyer’s mind. While we all wish for a crystal ball to give us the answers, the truth is, there’s no one-size-fits-all solution. But, don’t worry, I’ve got some insights to help guide your decision. Float simply means you have not locked in your interest rate and the rate or the points will continue to fluctuate daily with the market. Locking means you have locked in the interest rate and points.
Be aware: Just because you have asked your lender to lock in the interest rate doesn’t mean you ‘ll be approved. Depending on your credit score, or numerous other factors, the final rate and points could vary. If you are denied approval for that loan program and you are approved for a different loan program that lock won’t be valid on the new program. In short, unless you have full loan approval just because you are locked, the final rate and points could change.
First Up: If You Want a Sure Thing…
If you’re looking for a straightforward answer, and you’d rather not gamble on what rates will do next, then locking in your rate is the way to go. It’s like choosing a fixed price for your gas for the next ten years, regardless of whether prices go up or down.
But, If You’re Feeling a Bit More Adventurous…
Accepting that no one has a crystal ball can be liberating. You might think experts have the inside scoop, but in reality, predicting market movements is as much a gamble for them as it is for you. Even though it might seem like there’s a method to the madness, market predictions have proven to be a hit or miss.
The Catch with Predictions
Because everyone consumes information differently, we tread lightly with our predictions. You’ll rarely see us lean too heavily one way without mentioning other possibilities. It’s not about telling you what will happen; it’s about giving you the knowledge to make your own informed decisions. Think of it as learning to fish instead of being given a fish.
Considering Locking Your Rate? Think About This…
Many folks lean towards waiting for rates to drop before they lock in, attracted by the potential savings. But, there’s a pattern among the pros: the more they understand the market, the more they tend to lock in rates early. This doesn’t mean one strategy is universally better; it’s about managing risk and personal preference.
When Floating Could Work in Your Favor
When It’s a Gamble to Float
Solid Reasons to Lock In
A Reality Check on Predicting the Future
Day-to-day, predicting mortgage rates is a gamble. Historical trends suggest that trying to outsmart the market often doesn’t end well. Remember, if it seems obvious to you, others have likely already acted on it. Keep in mind, that if you could predict rates you would make millions of dollars a year as a bond trader!
So, What’s Next?
If you’re tempted to test your theories without risking real money, go for it! Keep a record and see how you do over a few months. If you find a winning strategy, keep it to yourself and maybe consider a career in hedge funds. Otherwise, understand that it’s often a 50/50 chance, and make your lock or float decision with that in mind.
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09 Apr 2024
When you’re looking into getting a mortgage, you’ll likely come across the term APR, or Annual Percentage Rate. Think of APR as the true cost of borrowing money for your home, which usually ends up being more than just the interest rate your lender talks about.
Here’s the thing, though: calculating APR involves a mix of upfront costs and a bit of human guesswork. Because of this, it’s not a perfect measure. Just because one lender offers a slightly lower APR doesn’t automatically mean you’re getting a better deal.
Let’s dive into something called “prepaid finance charges” (PFCs). These are basically fees you pay upfront to get your mortgage, not for any actual service like homeowners insurance (which you’d pay for regardless of a mortgage). Whether it’s a fee for processing your loan or something else, these PFCs are a big part of figuring out your APR.
Whether a loan has a lot of these charges or just a few isn’t necessarily good or bad. Sometimes, lenders might offer you a higher interest rate to cover these fees, meaning you don’t pay them upfront but over the life of your loan instead. This choice boils down to paying more now or more later.
The reason APR is important is because lenders have to tell you what it is by law, aiming to show the real cost of your loan. Sounds helpful, right? Well, it’s a bit more complicated because lenders calculate APR in their own ways. While most follow similar methods, some might tweak the numbers to make their APR look more appealing. Some lenders might also play it safe with what they count as a PFC to avoid getting in trouble with regulators, which can make their APR seem higher even if the upfront costs are the same.
You might see a lower APR, but because it has a lot of upfront fees it could be a bad option for you if you plan to sell the home, or refinance, in a few years. That’s because the APR is calculated over the whole term of the loan, but not many people actually keep the home or the loan for thirty years!
When comparing APRs make sure you are comparing the same type of loan. Don’t compare the APR for a 30 year fixed rate mortgage against and APR for an adjustable rate mortgage.
So, here’s the takeaway: Don’t just take an APR at face value. To really see which mortgage offer is better, you’ll need to compare the nitty-gritty details of those upfront costs. It’s a bit of a hassle, but it’s the best way to make sure you’re truly getting the best deal on your mortgage.
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09 Apr 2024
You want the lowest payment on your mortgage, right? So what is a mortgage rate exactly and who determines it?
Here’s a simple way to understand it:
A mortgage is a loan that you promise to repay. And it’s secured by your house…so if you don’t pay it back the lender gets to take the house. That makes it a pretty safe loan for the lender. In the lending world, safe usually means a lower interest rate.
While you might get a small loan from a credit union and pay that credit union back directly, mortgages are usually pretty large (especially with house prices today) so most mortgages eventually get bundled together with other similar mortgages and big investors buy them. A bunch of mortgage loans pooled together is usually sold as a mortgage backed security.
That’s not super important for you to understand, except for one thing…the market determines the interest rates, not your loan officer, underwriter or even the president of the mortgage company.
In the past thirty years rates have been over 10% and as low as around 3%. But none of that matters, because the interest rate today is determined by the market.
The market is simply what investors are collectively willing to lend money at. Investors want the best risk adjusted return on their money. Investors can do lots of things with their money such as buy US government bonds, invest in mortgage backed securities, or lend money to companies (not to mention investing in stocks, etc). Since a US government bond is considered the safest, that usually has the lowest interest rate. A mortgage to someone with perfect credit and a big down payment would be safer than a mortgage to someone that had a recent bankruptcy and a small down payment. A loan to Apple would be safer than a loan to a small company that isn’t profitable.
Since mortgage rates are usually considered pretty safe, but not as safe as a US government bond, mortgage rates will usually be higher than than a US government bond, but track pretty closely.
Since a 30 year fixed rate mortgage usually ends up getting paid off in around 10 years, mortgage rates are usually pretty correlated to the 10 year US treasury notes.
The federal reserve doesn’t control mortgage rates, but since they control the federal funds rate essentially the prime rate they indirectly control mortgage rates, because those investors just want the best and safest return. If the Federal Reserve raises rates in other areas mortgage rates will usually follow up up0, or if teh Federal Reserve is lowering other rates then mortgage rates will usually trend down.
The biggest impact on mortgage rates is inflation. Each week different economic reports are released. These reports influence the Federal Reserve’s actions and ultimately teh Federal Reserve is trying to keep the economy growing at a moderate pace with a little bit, but not too much inflation. We have another article on inflation, but the bottom line is that high inflation equals higher rates. Low inflation means lower rates. Bad economic news is usually good for interest rates (careful what you wish for…a low mortgage rate won’t help much if you’re unemployed).
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