Navigating Mortgage Rates: Weekly Review and Predictions📉📈

Navigating mortgage rates in Metro Detroit might seem daunting, but fear not! I’m here to simplify it for you. Whether buying or selling, let’s embark on this journey together and ensure you get the best deal possible.

Navigating Mortgage Rates - Weekly Review and Predictions for Metro Detroit | Team Tag It Sold

Navigating Mortgage Rates in Metro Detroit ~ Where Are They Heading the Week of June 24th. 

Hello, Metro Detroit neighbors. Well, June has been a mix of economic news so far. The excellent news is that PCE stayed the same at 2.8%, manufacturing a little higher. The jobs report came in hot on adding new jobs, 92,00 more than expected, and unemployment increased to 4.0%. The better news is that the CPI inflation report decreased for the second month down to 3.3%. 

The next hold date for mortgage rates is June 28th, when the PCE report is released. The 10-year treasury yield could skyrocket or trend down, so this will be the day not to lock your mortgage rate until mid-day and see how Wall Street is reacting to the report.  

The all-important demand for Mortgage-backed securities has declined for three weeks in a row, causing the MBS Price Gap average to increase to 2.750%. 

This blog post, “Navigating Mortgage Rates,” will provide weekly updates. We’ll review the trends for the week and upcoming news to determine where mortgage rates could be heading next week. For daily updates, visit “Today’s Mortgage Rate: What’s Driving the Change.”   To review graphs and to calculate your principal and interest payments, see “How Mortgage Rates Impact Your Monthly Payment.”  To review all blog posts regarding mortgage rates, Mortgage Category   Let’s get started Metro Detroit! 🤩🥳

Mortgage Rate Formula

Mortgage Rate Calculation for Metro Detroit | Team Tag It Soldn

Mortgage Rate Trends & Predictions... For Next Week

💥Important 💥Track the 10-Year Treasury Yield

To navigate mortgage rates, you must understand that The Federal Reserve (Fed) doesn’t directly determine them. However, the Fed does move the Federal Funds Rate up or down in response to inflation, the economy, unemployment rates, and more. This affects how the bond market and mortgage-back securities respond, influencing mortgage rates. Remember, mortgage rates are tied to Wall Street. 

10-Year Yield Rates from June

June so far been on another roller coast ride. At least this time, the trend is decreasing. We started the month at 7.05%, skyrocketing up to 7.52%. After the second month of good economic news regarding the economy cooling, mortgage rates are back in the 7% range plus or minus 0.1%. The jobs report is supposed to be released on July 5th, and the stock market is open. After the report is released, we’ll have to wait and see how investors react to bonds and securities. It‘s essential to track the yield, and it should stay stable until the morning of July 5th. Scroll through last week’s trends. 

Remember Yield + MBS Gap = Mortgage Rate.

CLICK PICTURE TO ENLARGE

Step #2  ~ Mortgage-backed Securities 

💥This is the most critical piece of the puzzle💥, navigating mortgage rates in the future, up or down. I’ve dedicated an educational blog post to Understanding Mortgage-backed Securities (MBS) Effects on Mortgage Rates” (start here)

Weekly Yield +  MBS Gap Rate = Mortgage Rates 

The MBS Gap Does Affect Mortgage Rates…See How😮

Knowing how mortgage-backed securities (MBS) and rates work is critical to saving money in Metro Detroit. Like the bond yield, securities are sold on Wall Street. The economy and Fed policies directly affect whether the trends increase or decrease. Every buyer is concerned about mortgage rates and wants to know where they are heading. This is how you find out. Soon, you’ll master knowing exactly when to buy your new home confidently. 

Calculate the Gap

The graph uses teal to show the average 10-year Treasury Yield Rate average for the week and orange for the MBS gap rate average for the week. The mortgage rate is shown as a percentage on top. The graphs on the left shows “What If Scenario,” highlighting the importance of tracking the MBS Gap and its effect on your mortgage rate. Yield + MBS Gap Rate = Mortgage Rate. The 50 year average for gap rate was 1.72%. We need to have investors confident in the mortgage market and adding mortgage-backed securites to their portfolio. Increase in demnad will cause the gap rate to go down and mortgage rates. The graph on the right is the actual calculation for each day. 

Scroll Through the Weekly “What If the Gap Rate Goes Down”
Click Picture to enlarge
MBS  Gap Trends 

For the past three weeks, MBS trading demand has decreased, causing the MBS Price gap to increase. The good news is that the yield has stabilized in the 4.2**% range, keeping mortgage rates in the 7% range. The first goal for the mortgage rate to shift down is for the gap to break 2.7% for three weeks in a row. That would be a good start. We want to see the weekly average trend down week over week. 

Average MBS Gap Rate of the Week 6-21-2024 | Team Tag It Sold
TO ENGLARGE GRAPH CLICK PICTURE ⬆️

Final Step = Mortgage Rates ~ We’ll review mortgage rate trends in two ways

 Freddie Mac PMMs 

 Freddie Mac posted a survey of loans that went through its underwriting system for the week and posted the results on Thursdays. This survey doesn’t tell us the points the borrowers paid to get the lower rate, the average credit score, or the average downpayment. It will give you an idea of where your mortgage rate could be. That’s why it’s important to understand mortgage rates to negotiate the best deal with your lender. When you hear the news headlines, they quote the Freddie Mac survey. I don’t use this survey to predict where I think the rate will be heading next because the data is skewed, but it will give you a range of how low your mortgage rate could be. 

Negotiate Your Fees and Points

Remember, your rate will be determined by the lender you choose and what they charge in points and fees. (Shop around, but don’t give out your social security number.) They will also use your FICO score (know your number) and your downpayment. To explore other lender options and compare mortgage rates, I’ve provided information on what various lenders are changing. Scroll through and view the differences and options. In my opinion, there is one lender that is way overcharging. Can you identify who that is? 

As of the 18th, there has been no change in mortgage rates from other lenders. 

CLICK PICTURE TO ENLARGE
2. Mortgage News Daily ~ Mortgage Rates Best for Tacking Base  Rate Trends
I’m using this Mortgage Daily News platform to Navigate mortgage rates, as it depicts a more accurate picture of rates before the underwriting system calculates your credit score, downpayment, and the points you pay to determine your mortgage rate. The lower the credit score and downpayment, the higher the mortgage rate. Mortgage Daily News is my go-to platform for tracking numbers and trends. Based on the Freddie Mac Mortgage survey for the week and the average from Mortgage Daily News, it will give you a range to work with the lender to negotiate rates. To keep up to date daily, visit “Today’s Morgage Rates ~ What’s Driving the Change.”
 

Month End For May 2024

Daily Mortgage Rates for the Month June 6-21-2024 | Team Tag It Sold for Metro Detroit
CLICK PICTURE TO ENLARGE

 

Understanding and Negotiating Mortgage Rates   Let’s Connect ⤵️

Boy, that’s a lot to pack in.🤩 Ready to explore your options to finding the right mortgage rates and terms in Metro Detroit? Let’s schedule a Zoom call and we’ll review options so you understand your purchasing power. That includes your rate, property taxes, payment mortgage insurance for loans under 20% down and homeowners insurance which will all affect your montly mortgage payment. We’ll also conver any other questions or concerns you may have. I’ll share my screen to give you a clear view of the market insights and help you make informed decisions. Schedule your appointment today.⤵️

For More Tips Scroll Down⤵️

Lots of Important Headlines ~ Economic Trends Will Affect Mortgage Rates ~ 👀

I track the headlines every day. It shows how the economy will affect Mortgage Rates for the day in Metro Detroit. Remember, mortgage rates are tied to Wall Street through bonds and securities. Mortgage rates will increase if investors read the tea leaves wrong and retract. There is a lot of noise right now, and you can cut through it if you track the numbers. The Fed has pushed back on the first interest rate cut from June; now, the next possible date is September. So far, we are on track. We are now seeing a shift in the economy, and it is showing signs of cooling for two months in a row. July’s numbers will be an essential clue to when we’ll see a shift in mortgage rates. Yes, you can predict where mortgage rates are heading next and follow the trends 🤩

You Must Track the Economic Trends to Know Where Rates are Heading 

Have you noticed that mortgage rates are climbing again in Metro Detroit? Let’s break it down. It’s all about the Economy and Inflation. 

Big Takeaway On Inflation and Mortgage Rates

Let’s review what will affect inflation—starting with manufacturing. Manufacturing increased slightly. Unemployment increased to 4.0%. PCE stayed the same at 2.8%. The better news is that CPI decreased to 3.3%. The weekly headlines reported on doom and gloom; I see this as a good sign, inching us closer to an interest-rated reduction in September. Wall Street is reacting based on the hope that July will be the first target date. But if you follow the numbers like I do, you know that wouldn’t be the case. Keeping up to date by tracking daily rates and changes as the news breaks throughout the week will be essential. 

Release Dates to Watch For

These dates could start the trend up or down depending on how Wall Street Reacts to the news. 

  • PCE June 28th (This one will be huge and could drive the rate sky-high, or we could see another significant shift down.)
  • Manufacturing July 2nd
  • Jobs Report July 5th  
  • Inflation ~ July 11th (CPI rates)
Source: Trading Times Economics on Manufacturing PMI #’s June 2024
Source: Trading Times Unemployment Rate #’s June 2024

PCE ~ Fed Preferred INflation Gauge for June 2024

Fed  Chair Jerome Powell Meeting July Meeting

There is not much to report from Jerome Powell. We are just watching the numbers. I’ll update this report and predict where mortgage rates will go in the next two weeks. PCE stayed the same, inflation numbers decreased, and mortgage rates followed. Next Fed Chair meeting is July 31st. I don’t foresee August’s first interest rate cut, even if the trends show the economy cooling. The Fed will want at least three months of data trending down and wait for September’s numbers. 

If Wall Street likes the numbers, we could see mortgage rates inch back down to the 6.7*% range without an interest rate cut. 

CPI Inflation Report for June 2024

Inflation up to May 2024 |Team Tag It Sold

 

What My Crystal Ball 🔮 is Telling Me for the Week of June 24th in Metro Detroit ~ 

We know that economic trends and inflation affect mortgage rates in Metro Detroit. So, what will next week bring? Calm before the possible storm with the PCE report on June 28th. 

Predictions for the Week of June 3rd

Our next lock-in hold day for your mortgage rate will be June 28th until midday. We’ll need to review the PCE numbers at 8:30 am and the effect on the 10-year treasury yield: this week, the mortgage rates base range of 7% plus or minus 0.1*%. Wall Street reacted favorably towards the last PCE Report. 📈📉 

We need an Economic Pivot.

For the Fed to lower interest rates, we need a weaker economy. What does that mean for mortgage rates? A cooler jobs market and an increase in unemployment. Consumers spend less and decrease retail numbers. (PCE) If the prices are high, leave them on the shelf and buy only the necessities. (CPI) If the economy weakens, the Fed will start lowering interest rates and changing policies. That shift will affect the bonds and securities market as investors add safe investments to their portfolios. Then mortgage rates will go down. 🥴 Keep up to date Metro Detroit and review this blog post weekly as we have some important dates coming up. 

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