Today’s Mortgage Rates: What’s Driving the Change❓

We will review today’s mortgage rates. I will also break down what is impacting the mortgage rate going up or down in Metro Detroit. 

What is Impacting Mortgage Rates Today for Metro Detroit | Team Tag It Sold

What is Impacting Today’s Mortgage Rates for April 12, 2024

Breaking News: Brace yourself. Unemployment went down, inflation went way up to 3.5%, and manufacturing is strong. The Fed will cut interest rates when the economy appears to be weakening and needs help. For now, the Yield was way up in April, and Mortgage Rates followed. 

If you’re on the journey to buying a home in Metro Detroit, you’ve likely been monitoring Today’s Mortgage Rates. Most lenders will start with the day-before rate numbers for quotes in the a.m. Then, update rates about mid-day. You’ll know where they are heading by monitoring the 10-year treasury yield. Remember, I track baseline mortgage rates; the mortgage rate doesn’t include points lenders charge to buy down the rate, your credit score, or your down payment. Your mortgage rate will be lower or higher depending on the above conditions. Rates have been all over the place recently hitting rock bottom, then soaring to new highs. Here is where we will review what’s behind those dramatic changes. Here’s a quick look at some key elements that play a significant role. Updated mortgage rates are released between noon and 2 pm. (Live Feed Below.)

Inflation and the Federal Reserve

Let’s talk about the Federal Reserve, or the Feds for short. The Feds don’t set the mortgage rates you see, but their actions significantly impact rates going up or down. When they notice price changes, Inflation, jobs, unemployment numbers, or how much people spend, they might increase or decrease the Federal Funds Rate, impacting mortgage rates. The economic news can make today’s mortgage rate trends higher or lower. The rate increase hasn’t slowed the economy or consumer spending. I don’t see the Fed reducing the interest rates over the next two months. July is our next target date, and it doesn’t look promising based on the new inflation numbers.

Know the Market You’re In

When the Fed starts the interest rate cuts, real estate in Metro Detroit will change quickly, including home prices. I recommend following up on Monday’s “Navigating Mortgage Rates ~ Empower Your Move. We’ll review all the numbers and trends, speculate where mortgage rates are going for the next week, and review home prices by city and price range. What will be important is tracking home prices and knowing your home purchasing power. Tips are below. 

Lots of Important Headlines For Today ~ 👀

Based on March data, this confirms no rate cuts for Metro Detroit in June. I’m keeping a close eye on this so we can predict where mortgage rates are heading next. We’ll need to watch the month-end for May and June to see if there are possible cuts in July. We now know Inflation was higher across the board, so we are waiting for new numbers in May. I’m concerned the Fed is now fueling Inflation due to the high interest rates. Fed meets on 4-30, so let’s see if they are thinking about how to tackle Inflation.  

Step #1 ~ The 10-Year Treasury Yield  ~ Your Base #

The 10-year Treasury yield is the base figure for calculating today’s mortgage rates, which move up or down constantly throughout the day. Additionally, mortgage companies look at the 10-year Treasury Yield to decide how much interest to charge on home loans. If the Yield goes up, mortgage rates follow. 

Trends in Review Today 4-12-2024 ~ Yield is down slightly

As we all know, the economy was strong in March, and inflation skyrocketed 🚀. Today, the yield rate went slightly down, impacting mortgage rates a little lower. Investors are skeptical that the first interest rate cut will be in July. The first goal is to have the Yield break 4.0%. The actual mortgage rate will be out between Noon and 2 p.m. ⤵️The early yield rate will let you know if the mortgage rate is moving up or down. Investors’ supply and demand fuel the 10-year Treasury yield, and we don’t have the demand. Yield + MBS Gap Rate = Mortgage Rate 

Step #2 ~ Mortgage-Backed Securities (MBS) Gap # for 4-12-2024 

Knowing how today’s mortgage rates are set is essential if you’re curious about where they are heading. It all starts with the 10-year Treasury Yield, your base, the MBS Gap #, and the voilà…mortgage rate. If you haven’t already, check out the blog post “Understanding Mortgage-Backed Securities’ Effects on Mortgage Rates.”… Start There

MBS Graph Trends ~ Back Up

Today’s MBS prices are impacting mortgage rates. MBS prices are in the strong positive range, which should result in lower mortgage rates. Investors may be rethinking the stock market, seeing it has been lower since the announcement that inflation went up. Mortgage rates will be down today based on the decrease in yield by 0.077%. The yield and MBS Gap increased, so we will need to check if this is a pattern or a fluke for the day. The first goal for the MBS gap is to stay under 2.7%. Watching the gap/spread will be the first sign that mortgage rates are trending down week over week. Inflation numbers are significantly pausing the bond and securities market today. 

💥”What If”🚀 Investors start investing in Securities & the MBS Gap Rate Goes Down? 

High-interest rates have caused the 10-year treasury to go up. If investors were not making money on the stock market and it was on shaky ground, they should start investing in more secure investments like Bonds and Securities. As you can see from the graph below, if investors were purchasing mortgage-backed securities, mortgage rates would be significantly lower even if the yield rate stayed higher due to interest rates. For now, the economy and the stock market are too strong to see Mortgage Rates come down to the first goal of 6.5%. 

 

CLICK PICTURE TO ENLARGE

MBS Gap Goals ~ Impacting Mortgage Rates

  • Goal #1: Keep the MBS gap rate below 2.70%.
  • Goal #2: Aim for a steady drop to the 50-year average of 1.72%. This will help stabilize mortgage rates.

The mortgage-backed securities and the 10-year Yield are moving in the wrong direction again, causing mortgage rates to increase. I crunch the weekly numbers on the blog post “Navigating Mortgage Rates ~ Empower Your Move” every Friday by 6 pm. It’s your guide to where mortgage rates are headed next week in Metro Detroit. Review all the trends for the week. 

Mortgage Rate 7.3% down -0.07 for April 12, 2024 & Up +0.25 for the Month

I now post the Mortgage Daily News live feed.  (Add the Yield + MBS gap + Mortgage Rate) Mortgage rates skyrocketed 🚀 this week. Why? Your base, the 10-year Treasury Yield, skyrocketed, causing the mortgage rates to follow. The low unemployment news, an increase of 3.5% in inflation, and a robust economy have pushed investors out of the bond and securities market, knowing there will not be an interest rate cut in June. Click “Current Mortgage Rate” to enlarge and access mortgage news.  The mortgage rate was 6.85% and declining on 3-8-2024. 🥺 Just stubborn inflation news, low unemployment, strong manufacturing, and the economy doesn’t need the Fed’s help by lowering interest rates. ⬇️ Usually, the mortgage rates numbers are out around noon and 1 p.m.

Mortgage Daily News 4-12-2024

Based Rate before Credit Score ~ Points to buy down rate ~ Down Payment

Mortgage Daily News 30-year Mortgage Rate for April

Why Did Mortgage Rates Go Up Over 7%❓

Have you noticed that mortgage rates are climbing again in Metro Detroit? Let’s break it down. It’s all about a strong economy and inflation. The Fed will lower interest rates when the economy gets weaker. 

Big Takeaway On Inflation and Mortgage Rates ~ ⬆️

So now we are back to supply and demand in the bond market and securities. At this point, we are chasing our tail, Metro Detroit. 👿 Investors need to chew on the numbers that were released this month. The Manufacturing Report is out and growing steadily in 21 Months. March added more jobs than was speculated at 303,000, increasing the unemployment rate to 3.8%. Inflation rose to 3.5%, and the Economy is still strong. People have jobs, and the cost of living is growing, and we’re still spending money despite higher prices. Stock Market is hot, and investors are making money. There are no interest rate cuts for the next two months; we hope for July. 

Trading Economics Manufacturing PMI #’s for March 
Trading Economics on Unemplyoymnent#’s for March


source: tradingeconomics.com

Inflation and Mortgage Rates 4-10-2024

Jerome Powell recently shared insights from the April 30th. As it stands right now, based on numbers, inflation went up to 3.5%. There will be no rate cut in June, so our next target date is July. The Fed will review trends over the next few months to determine what fuels inflation. Based on what I’ve been following, if you are holding out for lower mortgage rates around the 6.5% mark, maybe late summer or early fall. They will not start trending down until the Fed makes policy changes and lowers the interest rates to bring investors back into the bond and securities market. 

Inflation Line Graph for March 2024 | Team Tag It Sold for Metro Detroit

My Crystal Ball 🔮 is Telling Me Today…

Let’s start with the inflation. All the numbers appear to be moving in the wrong direction…UP. 👿 We’ll now know the high inflation of 3.5% will be impacting Mortgage Rates. The trend will exceed 7% until the Fed meeting on 4-30. I don’t see much change until then. Investors are not jumping in on mortgage-backed Securities or bonds.

I agree with the economist.

Based on the numbers, the Fed needs to consider lowering interest rates. Keeping them this high won’t bring down gas at the pump, home rental prices, car and homeowners insurance, or the cost of doing business…lowering the interest rate will. JP Mortgage wrote an article on 4-9-2024, ” Are High-Interest Rates Now Fueling Inflation?” I fear the Fed stubbornly holds on to the 2% Inflation rate. Watching the numbers and core inflation, is the Fed starting to fuel inflation? I don’t see the Fed raising interest rates to tackle inflation; that would put us in recession. So, we are in a waiting game, and for now, there is no relief from the high Mortgage Rates. 

We need an Economic Pivot

We may see investors pivot in the days ahead after the April 30th Fed meeting, causing a slight adjustment in the 10-year Treasury Yield and Mortgage-backed Securities. Based on what I see, it’s another 30 days of following the numbers and wait and see. The MBS gap rate will tell us whether this will decline long-term. Today’s Fear & Greed Index Today is 49, which is in the neutral territory. Investors are chewing on the data, knowing there will be no interest rate cuts in June and maybe not July. 

Moving the Baseline ⬆️ Today

I’m moving the Baseline up from 7% to 7.2%, and mortgage rates should fall between Plus and Minus 0.15%. With the inflation not trending down, there is no interest rate cut for June. Mortgage Rates will not be trending down anytime soon. Future Projections: to review the weekly trends, visit Navigating Mortgage Rates ~ Empower Your Move, updated Sunday by 6 p.m. I’m reviewing my notes to find trigger data for a recession in 2000 &2007. I know high unemployment triggered the Great Recession, but I want to review the numbers leading up to that point. Yes, I was running the numbers back then, too. 🤣 During the last housing boom 2000, my buyer’s mortgages averaged 8.75% in Metro Detroit.😨 Feel better😍

Important Future Dates to Watch & How They Will be Impacting Mortgage Rates

Next up are May’s economic numbers. First is the jobs report on May 3rd, including manufacturing numbers on May 1st and the inflation rate on May 15th. The economy is robust. We don’t like the higher cost, but that hasn’t stopped us from spending. The spring market will be more of the same with higher Mortgage Rates. The Fed meeting will be on April 30th. Remember, Yield + Gap = Mortgage Rates. See you tomorrow. 

Mortgage Calculator and Home Affordability Tool

Find out what you can afford in your new home in Metro Detroit and your monthly mortgage payment. Also, add in your yearly homeowner’s insurance divided by 12 months. The most important is your taxes. Don’t go by what the current seller is paying. Your taxes will be higher overall. Call the municipality you want to move to get their current tax millage rate. Suppose it is 30 mills, and you will purchase a 350,000 home.

Take the price of the home and divide by 2 = $175,000. 30 mils x $175,000, move your decimal over, and your taxes will be approximately $5,250 per year divided by 12. So, you add the principle ~ Interest ~ PMI (your lender can give you a ballpark) ~Insurance ~ Taxes, which will equal your monthly payment. I recommend knowing your numbers before you even start looking at homes. Your tax rate also will influence whether you stay on a budget regarding your monthly mortgage payment. 

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