Mortgage Rate Update June 16, 2014

Mortgage rates are more or less unchanged from last week.

It’s a busy Monday morning in terms of fresh economic news.  The National Association of Home Builders released results for its June home builder survey.  Builder confidence, a forward looking indicator, jumped 4 points showing that home builders are more optimistic about future conditions.

Other reports released by the Federal Reserve showed stronger than expected manufacturing activity in the Empire State region, stronger than expected industrial production, and higher than expected capacity utilization.  Generally speaking good news for the economy is bad news for mortgage rates but rates are holding steady.

Overshadowing the positive economic news is renewed geopolitical tension in Iraq.

The US is ordering some officials out of the country in response to renewed violence between Sunni militants and the government.  Iraq is the 7th largest oil exporter in the world so any disruption to the oil supply would threaten the already fragile global economy.  Bad news for the economy is good for interest rates.

Looking ahead, the Fed will conduct its regularly scheduled monetary policy meeting tomorrow and Wednesday.  Their post meeting remarks due out on Wednesday will be closely watched by the financial markets.  For now we can float until Wednesday as I don’t expect rates to move much ahead of the Fed’s announcement.

Current Outlook: floating