Mortgage Rate Update January 19, 2016

Interest rates are extremely attractive.  They are currently at the best levels since October of last year.

I’ve written numerous times about how the stock market can impact mortgage rates.  All else being equal when stocks do poorly interest rates benefit as a result of a “flight-to-safety”.  Want to see a great example of this?

Over the past month the S&P 500 has fallen by approximately 10% (on a related note see HERE).

Over that same time period the yield on the US 10-year treasury note, which mortgage rates tend to track, have improved as well.

The stock market will likely overshadow other factors in this holiday shortened week.  If stocks rebound then mortgage rates may reverse higher but if they continue to slump we could see rates move even lower.  If I knew with certainty what was going to happen you and I could make a lot of money.

Given that mortgage rates have improved by .125%-.25% in the past month I am going to recommend a locking bias even though I can see stocks continuing to struggle.

Current Outlook: locking bias