Mortgage Rate Update March 24, 2016

Mortgage rates are unchanged from last week.

It’s been a relatively quiet week with regard to economic news.  Not only are people not paying attention because they’re on spring break but there is also not much to pay attention to.

Quietly, the US stock market has been on a nice rally.  Since mid-February the S&P 500 has had 21 positive trading days and only 8 negative days.  Over that timeline the S&P 500 has risen by ~11.5%.

03-24SP500-Portland mortgage rates

Is the market overheated?  One contrarian predictor of the stock market is investor sentiment.  When investors are “bullish” on the markets it’s usually a great time to sell and vice versa.  In a recent research note Peter Boockvar of CNBC pointed out that investor sentiment is currently at its highest level since July 2015.  In case you need a reminder on what happened in August last year refer to the chart above.

If stocks react lower in the coming weeks, as many analysts are starting to predict it would likely generate demand for safe-haven assets including US debt instruments which would drive yields lower.  I am going to maintain a floating bias to see if this pattern comes to fruition.

Current Outlook: cautiously floating