Mortgage Rates In March:
2019 mortgage rates have started off the year near their one year lows. However since late January they’ve been stuck in a range. After 30 year fixed mortgage rates moved above 5.00% last fall mortgage rates have since moved down to below 4.50%. March 2019 mortgage rates will most likely start off the month below 4.375% (30 year fixed rates) and 15 year fixed rates will most likely start off the month below 3.75%. What are some of the factors that might influence mortgage rates as we head into March?
This is always the number one focus for mortgage rates. Late Fall 2018 – early Winter 2019 economic data started to show the economy was slowing. That has continued in 2019 however some data in 2019 (ie the BLS Employment Report) has shown areas of strength. So heading into March it appears we have a mixed bag when it comes to economic reports. We’ll have to wait and see if that changes moving forward.
Trade With China:
This has had some influence over mortgage rates. Some believe the slowing economy can be attributed to two specific things. The government shutdown (resolved) and trade tensions/tariffs with China (getting resolved). Just look at stocks; is the stock market trading like the economy is slowing? However things are different in the bond market and with mortgage rates. The belief that the slowdown is temporary has limited support in the bond market. A resolution to the trade tensions will be a positive for the economy however it’s unclear to how much of a negative it will be for mortgage rates. As time goes on the impact on mortgage rates might be less especially if the economy continues to slow.
Additional Things To Watch:
We’ll be keeping an eye on what the Fed has to say and Fed action (there is a Fed meeting later in the month), and Washington DC. Recently some Fed members have been out with some very favorable bond friendly comments. This has been a positive for mortgage rates. Going into their next meeting analyst we will be focused on what the Fed has to say about the current economy and future expectations. Also; analyst want to know if the Fed will hike rates again this year. They also want to know; how are they handling their balance sheet reduction program. As for Washington DC; keep an eye on policy initiatives and if they’re able to get anything done. As the economy slows the Federal government may need to provide support to encourage economic growth however if gridlock continues in Washington then that support may never show up further deepening the economic slow down.
Anticipation For March Mortgage Rates:
Predicting mortgage rates is nearly impossible but we can use current information to help guide us with possible directions mortgage rates may move: down, sideways or up. The most likely scenario for mortgage rates is to remain in their range until something breaks that range. Nothing so far has moved mortgage rates out of their recent range and it might just be that there is a “technical” move with bonds that forces mortgage rates above or below the recent range.