Current Mortgage Rates for Friday, December 12, 2014

Despite the volatility we’ve seen in mortgage backed securities recently, mortgage rates are really not significantly changed since the middle of October.  This week’s Primary Mortgage Market Survey from Freddie Mac reported the average mortgage rate on a 30-year fixed-rate mortgage at 3.93%. The average rate on the week of October 16th?  3.97%. So far this morning MBS are rallying, and presuming the rally continues, we’ll see a slight improvement in rates today.


Today’s Economic Data:

There are a couple economic releases today.  First off, The Producer Price Index for November was released today.  Inflation continues to be low to non-existant.  The headline number showed a -0.2% decrease in PPI from October, just a little above expectations.  The core number (ex-food and energy) came in flat from October, and at 1.6% year-over-year.  Next week we get the Consumer Price Index for November, and I wouldn’t anticipate we’ll much inflation there, either.

The mid-month reading of consumer sentiment for November came in at 93.8, compared to a consensus expectation of 89.5.  Although this is not a particularly significant release, it’s another sign that the economy is trending in the correct direction.

Today’s Fed Speculation:

There’s a Fed meeting next week, and it’s widely anticipated that there will be a change in the forward guidance, specifically that the promise to keep rates low for an “extended period” will be changed to something indicating that the time frame for a rate hike will be determined by the data as opposed to the calendar.  I think the expectation is so widespread that any change is likely baked into bond prices, although I wouldn’t be surprised if things get a little volatile on the 17th.  If you are in the process of getting a mortgage and have a floating rate, it may be wise to lock prior to next Wednesday.

I don’t know that I can summon up any more words on the Fed this morning.  I would direct you to Tim Duy’s December 8th blog post “Fed Updates Ahead of FOMC Meeting” if you want to read some pertinent (and fairly wonkish) insight into what the Fed may be planning for the next few months.  The long and short is that it still looks like the path is being cleared for a Mid-2015 rate hike.  Depending upon the data, of course.

This Week’s Significant Economic Data:

Monday:

• No significant data.

Tuesday:

• Job Openings and Labor Turnover Survey

Wednesday:

• No significant data.

Thursday:

• Weekly Jobless Claims: Expected: 295k, actual: 294k.
• Retail Sales (core, ex-gas and -auto): Expected: +0.5%, actual: +0.6%.

Friday:

• Producer Price Index – Final Demand (headline, month-over-month): Expected: -0.1%, actual: -0.2%.  Core expected: +0.1%, acutal: flat.
• Consumer Sentiment

source: totalmortgage.com