Mortgage Rate Update January 28, 2016

Mortgage rates are unchanged from Monday.

Yesterday the Fed concluded their latest monetary policy meeting and delivered the highly anticipated statement.  As we expected (see HERE) the Fed did come slightly more “dovish” in their outlook for hiking short-term interest rates in 2016.  As a reminder the Fed does not directly control mortgage rates.

Following the December meeting the Fed had led the markets to believe that they would hike 4 times during 2016 for a total increase of 1.00%.  Since then the US stock market has declined by ~10% and equity markets in Japan, China, and France are down even more.  In their statement the Fed acknowledged the shift in the economic outlook and said they’d be “…closely monitoring global economic and financial developments…”.  At this point the markets a placing a very low probability on a rate hike at the next meeting scheduled for March.

In housing news the S&P Case-Shiller Home Price Index report was released on Tuesday.  The report covered home price changes for the month of November 2015.  In case you missed it Portland led the nation in annual home price appreciation at 11.1%.  That report coupled with the Pending Homes Sales report released by the National Association of Realtors today indicate a market where demand remains strong and supply is scarce.

From a technical perspective interest rates remain very attractive going back a couple years.  I am going to recommend a locking bias.

Current Outlook: locking bias