Mortgage Rate Update May 12, 2014

Although mortgage note rates are unchanged from Thursday the accompanying closing costs are slightly higher so in fact the overall rate environment is moderately worse.

With no significant economic news out today mortgage rates are taking direction from stocks and technical trading patterns.  Stocks are higher and bonds are lower to start the week.

As I’ve been writing over the past couple weeks geopolitical uncertainty regarding Ukraine and Russia have helped drive a “flight-to-safety” in the financial markets which has pushed yields lower.  Over the weekend voters in Eastern Ukraine passed a referendum to separate from Ukraine and align with Russia.  The legitimacy of the vote remains in question and uncertainty reigns.

Even so, according to CNN Money’s Fear & Greed Index investors are rotating back into stocks and away from bonds.  As a result, the rate environment has worsened slightly.

The rotation may be short-lived as technical trading patterns suggest floating which is exactly what we’ll do.

Current Outlook: floating