Mortgage Rate Update January 21, 2016

Mortgage rates are unchanged from the beginning of the week and remain at multi-month lows.  If you missed the window for refinancing in October 2015 now is your time to revisit your options.

As I wrote about on Tuesday weakness in the stock market continues to help mortgage rates improve.  Much of the media focus here in the US has been on our domestic equity markets which are off by approximately 10% in the past month.  Did you know Asia is faring much worse?

From the “it could be worse department” Japan’s Nikkei 225 stock index is off by approximately 20% since the beginning of December and China’s Shanghai Stock Index is off nearly 50% since June.

Global stock market volatility encourages investors to dump equity holdings and seek “safe-havens” for their capital.  This additional demand for US fixed income securities drives yields lower which is why mortgage rates have improved by .125%-.25% over the past month.

Will this trend continue?  It’s always difficult to know.  Many stock markets analysts have turned cautious.  I am going to recommend a floating bias since momentum is on our side.

Current Outlook: floating