Mortgage Rate Update July 28, 2014

Mortgage rates are effectively unchanged to start the week.  Rates have oscillated within a tight range since the 4th of July holiday.  As I’ve repeatedly written, domestic economic news has been fairly strong as of late and is place upward pressure on rates.  Counterbalancing this pressure is economic weakness in Europe and ongoing geopolitical tension.

The technical picture in the bond market reveals that we may be in store for a “break-out”.  This is when bond prices “break-out” of a tight trading range and move sharply up or down.  Looking at the economic calendar for this week there is plenty of scheduled reports that could trigger such a move.

Of particular interest is the S&P Case-Shiller home price index due out Tuesday, second quarter GDP and the Fed’s latest rate decision set for Wednesday, and then the all-important jobs report scheduled for Friday.

Assuming these reports continue to reflect growth in our economy it will make it hard for rates to improve from current levels.  However, there continues to be speculation that US stocks are headed for a correction and if we see equity values fall it would help rates remain relatively low.

Current Outlook: floating