Mortgage rates continue to slide as jobs come in low
The 10-year Treasury posted yearly lows recently and mortgage rates followed suit. As of August 31, the average 30-year fixed rate is 3.82%, the 15-year fixed is 3.12% and the 5/1 ARM is 3.14%*, all down from the previous week and marking their bottom levels for 2017. The August jobs report from the U.S. Bureau of Labor Statistics reported 156,000 new positions on non-farm payrolls—slightly under expectations—while the 4.4% unemployment figure was a tick higher than July.
Despite the flat employment data, equities markets continue to soar—the Dow was trading north of 22,000 on Friday—in the face of continued missile tests and threats from North Korea and the Hurricane Harvey tragedy unfolding in Houston. The probability of another Fed interest rate hike by the end of the year, however, is now under 50%, with roughly two out of five economic experts predicting a bump before 2018.** For now, the markets are beginning to think the lack of inflation in recent data could put the Fed’s plan for one more rate hike on hold.
Fed Chair Janet Yellen’s remarks at Jackson Hole last week may have signaled her imminent departure, another factor that could affect rate decisions. Offering little insight into the future of monetary policy, she opted to opine on the Fed’s decade-long roll in the markets since the financial crisis, rejecting the notion that regulation has stifled the banking sector and insisting that higher capital requirements have actually promoted growth in lending. Her speech came on the heels of staunch criticism from the President, who has not stated whether or not he will reappoint her in February. Logically, her reappointment looks unlikely given his views on regulatory relief, specifically Dodd-Frank.
With mortgage rates at their yearly lows, now is an ideal time for homebuyers and those looking to refinance to call their loan officer and start reviewing products, options and programs.
To talk with a seasoned mortgage expert about mortgage rates and more, contact us today at Rate.com.
*FreddieMac.com, “Compilation of Weekly Survey Data”
**CMEGroup.com, FedWatch Tool