Mortgage Rate Update March 16, 2015

Mortgage rates are unchanged from the end of last week.

The main focus this week is on the Fed.  They begin a regularly scheduled two-day monetary policy meeting tomorrow and will deliver a policy statement on Wednesday.  The financial markets are anxious to hear if the Fed repeats the word “patient” in the statement.  There is speculation they may remove the word which would signal that the Fed intends on raising short-term interest rates in the next couple months.  If the Fed keeps “patient” in the statement it would signal that the Fed plans on keeping short-term rates near zero for an extended period of time.

It all boils down to one word this week.
It all boils down to one word this week.

There are a couple other data points on the calendar this week but the Fed’s policy statement will garner the most attention.

From a technical standpoint mortgage-backed bonds are battling overhead resistance and therefore may have a tough time moving any lower.

No matter the outcome of the Fed policy statement I am concerned rates may react higher.  I would expect stocks to rally in the event that the Fed leaves “patient” in the statement.  When stocks rally interest rates often suffer.  If the Fed removes “patient” from the statement then it would signal short-term rates are heading higher.  Therefore, I would recommend locking today or tomorrow.

Current Outlook: locking before Wednesday’s Fed statement

The views and opinions expressed in this site are those of the author(s) and do not necessarily reflect the official policy or position of Cherry Creek Mortgage Co., Inc. This is for informational purposes only. This is not a commitment to lend.