Great time to secure a rate
After setting new all-time lows in early trading this morning, the 10 Year Treasury Note yield is now moving higher as the day wears on. Yields on mortgage bonds are also higher, which has added upward pressure to mortgage interest rates. The quick reversal is likely due to profit taking ahead of today’s Fed meeting minutes’ release, outlining the discussions had during June’s Federal Reserve Open Market Committee meeting. Fed meeting minutes are generally not good for mortgage interest rates, as more ‘Hawkish’ members of the Fed tend to make statements that can frighten the bond market. Regardless of what they say, a Fed rate hike will not likely be happening anytime soon. Although most investors realize this, they still become skittish at the thought of a rate hike by any Fed member.
Today would normally be the day we receive ADP’s estimate of job growth for the month of June. However, due to the 4th of July holiday, the release was postponed until tomorrow. We will still receive the more significant report from the Bureau of Labor Statistics on Friday. Given the weakness shown in the prior two month’s reports, it will be interesting to see if the downward trend is continuing. Continued signs of a slowing job market will help add downward pressure to mortgage interest rates. We will have to wait and see what happens.
It appears that mortgage bonds will be taking a break from their move higher, which will add upward pressure to the APR of mortgage interest rates in the near term. Since bonds have broken beneath a floor of support, it makes sense to lock in here if you need to close soon. If you choose to float, as always, do so carefully. Mortgage interest rates are now at three year lows. Now is a great opportunity to secure an incredible interest rate.