Mortgage rates for today (December 30th, 2019) are stable as we finish off 2019. As previously discussed we were not expecting much these last few days as most people are focused on other things....like celebrating the new year and being with family and friends. Next week we should start to see applications rise for both refinance and purchase transactions.
The Mortgage Backed Securities market and the 10 year Treasury both opened lower this morning but well within the recent range we've seen. Selling in the European bond market has spilled over into the US bond market.
Chicago PMI:
Later today the Chicago PMI report gets released. Last month the report came in at 46.3 (which was a bit higher than the 43.2 reading in October) and the market is expecting a reading of 48.0. Not a great number (it really should be above 50 like it was earlier in the year) but non-the-less it would be improvement from last month.
Typically this report can have an impact on the MBS market and thus consumer mortgage rates however with the holidays its unlikely that will happen. A big beat or a big miss will trigger a market reaction but the full impact to the market and mortgage rates will probably not be felt until after January 1st.
Tomorrow's Big Report:
Tomorrow is the Consumer Confidence report which has been strong in 2019. In fact the Fed has noted several times that the economy is doing well due to the strong consumer and a good labor market. Last months Consumer Confidence reading came in at 125.5 (which was loer than the 125.9 reading in October) and the market is expecting a reading of 128.2 for the December report.
Like the Chicago PMI report the full impact to mortgage rates will probably not be felt until after January 2nd.
Current Market:
Despite the Phase One trade deal and a clear indication that Brexit will happen (two huge concerns for mortgage rates in 2019) we're seeing some great opportunities as we head into the market. And this is for both FHA home loans and Conforming/Conventional home loans. This time last year mortgage rates were significantly higher but it was the begining of a big move down in interest rates for most of 2019.
Looking at January we expect more of the same. The biggest factor for mortgage rates is going to be the economy. Always has been the biggest factor and always will be the biggest factor. Inflation is another big factor but the Fed has come out recently and said they are not really concerned about it and that if inflation does pick up they may let it rise above target before taking any action. That is good news for MBS and consumer mortgage rates.
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