Last week ended with mortgage rates on hold at the best levels of our lifetime following a weaker than expected Employment Situation report.
The most anticipated event in the week ahead is the Federal Open Market Committee’s meeting, where our nation’s monetary policy is set. It is widely accepted that there will be no change to the current Fed Fund rate of 0 to .25%; however, market participants will scour the statement for any hint of future monetary policy and the Fed’s outlook on the economy.
As far as economic data, the highest impacting reports will be released on Friday when we get three reports on the health of the American consumer. First out will be a read on inflation at the consumer level with the Consumer Price Index. Released at the same time will be the Retail Sales report which shows us whether consumer spending is moving higher or lower from last month. And finally, we get Consumer Sentiment which shows us how you, the consumer, is feeling about your own personal finances and the economy as a whole.
Lastly, we have another round of Treasury debt being offered at auction. Tomorrow, the Department of Treasury will offer $34billion of 3 year notes, followed with $24billion of 10 year notes on Wednesday and $16billion of 30 year bonds on Thursday. Since the life of a mortgage if much closer to 10 years than 3 or 30 years, Wednesday’s auction can have the greatest impact on mortgage rates.
Lender rate sheets improved today. The par 30 year conventional rate mortgage remains in the 4.25% to 4.50% range for well qualified consumers. To be considered well qualified you must have a FICO credit score of 740 or higher. For consumers with lower FICO scores, you should consider a FHA loan which offers similar rates but with higher closing costs.
If you are closing within the next 15 days, I would lock and remove the risk of rates rising. Consumers closing in more than 15 days can probably float for now but be prepared to lock just in case rates start to rise.