No sooner do we get done sharing some good news with you that things reverse direction. Last Thursday we reported that a few days of dropping rates had brought the average offering down to a three-month low. The very next day began what is currently a five-day streak of rises, resulting in what is currently a three-week high for rates.
We’ll go ahead and get the good news out of the way, which is to say that the three-week high only equates to 4.25 percent for a 30-year fixed rate, in most cases. Some lenders have bumped up to 4.375 percent, however (and a scant few are still offering at 4.125 percent).
What’s the story for the shift this week?
Most of the movement revolves around Janet Yellen’s address to Congress on Tuesday. This event led rates to rise in two parts. First, there was the general anticipation of her news. The Federal Reserve Chair of The Board was expected to stick to her guns, implying that the Fed would continue to look for several rate rises during the calendar year. The first bit of mortgage rate rises was a response to this.
Then she actually spoke. She never actually confirmed anything regarding rate rises during 2017, but she certainly didn’t deny them. And that’s more than enough to get lenders to raise their rates in expectation.
One can get an idea for where bigger buyers are headed by looking at what smaller buyers are doing. MarketWatch reports that retailers, including those in the department store market (which had been taking a hit for a while), posted strong sales during January. Investors take this, coupled with rising inflation, as a signal to move their money out of bonds.
We like to review Mortgage News Daily for what their friends are saying. Here are two:
“The trend is NOT our friend.” -Ted Rood, MB Financial Bank
“The current trend is not our friend.” -Victor Burek, Churchill Mortgage.
Solid advice is probably to lock at this point. There’s a chance that rates could settle back down to last week’s levels in the next week, but it’s not a safe bet.