As widely expected, the Fed announced that it will begin in October to reduce the quantity of Treasury and mortgage securities on its balance sheet.
Of much greater interest to investors, the outlook for the pace of future rate hikes was a little faster than expected. Roughly 75% of Fed officials forecast one more rate hike this year and three rate hikes in 2018.
August existing home sales decreased 2% from July to an annual rate of 5.35M, below the consensus of 5.45M, and the lowest level since August 2016. Existing home sales were 0.2% higher than a year ago. Total inventory of existing homes available for sale fell 2% to a 4.2-month supply, and it was 7% lower than a year ago. The median existing-home price was 6% higher than a year ago.
As a mortgage rate shopper, it's important to know when today's rates are changing. This is because, when mortgage rates change, mortgage lenders will not honor rate quotes which have not been previously "locked".
To lock today's mortgage rates, then, be sure to commit with your lender before current rates begin to move. Whether you're trying to lock a purchase or a refinance loan, the market waits for no one.
Today's Mortgage Rates Analysis
Today's mortgage rate analysis is based on live mortgage-backed securities (MBS) pricing provided by MBSQuoteline, a real-time mortgage market data service available to loan officers, real estate agents, and other finance professionals.
The MBS data supplied by MBSQuoteline is the same market data used to formulate current mortgage rates by the nation's mortgage lenders. The chart at top depicts today's Fannie Mae mortgage bond pricing. Fannie Mae bonds are linked to conventional mortgage rates which include mortgage rates for programs such as the Home Affordable Refinance Program (HARP 2.0), the 3-percent down Conventional 97 loan, the HomePath mortgage program, and others.
MBS prices are inversely related to today's mortgage rates. When bond prices rise, mortgage rates sink. In general, a twenty-five basis point change in MBS pricing -- up or down -- leads to a 0.125 percentage point change in mortgage rates.
Note that the chart above does not depict the path of today's Ginnie Mae mortgage bonds, although Ginnie Mae bonds and Fannie Mae bonds tend to move in similar directions.
Ginnie Mae bonds correlate to today's mortgage rates for FHA loans, such as the FHA Streamline Refinance, which are insured by the Federal Housing Administration; VA loans guaranteed by the Department of Veterans Affairs; and USDA loans guaranteed by the U.S. Department of Agriculture.