Mortgage Rate Update May 22, 2014

Mortgage rates remain at multi-month lows this morning.

The highlight of the economic calendar this week came yesterday when the Federal Reserve released minutes from their last monetary policy meeting.  The minutes did not offer any surprising tidbits and as a result interest rates held steady near-11-month lows.

In housing news, the National Association of Realtors released its monthly report on existing home sales (closed transactions) for April.  The results showed in the West that the number of transactions increased modestly from March and home prices continued to appreciate, albeit at a slower pace than previously seen.  The overall number of transactions remained ~7% below April 2013 but those of us in the industry know that the decline is not due to a lack of demand, its a lack of inventory (which is why home prices continue to climb).

existing-home-sales-5-22-14

Weekly jobless claims reversed higher in this week’s report after touching multi-year lows last week.  Bad news for the economy is good news for mortgage rates.

From a technical perspective mortgage rates remain on a nice run.  Over the last month mortgage rates have improved or remain unchanged in 18 of the 23 trading days.  Fixed rate mortgages remain .25%-.375% better than where we started the year.  Will this run continue?  Momentum remains on our side but lets not get too greedy.  I don’t expect anyone will be disappointed 3+ years from now by locking in today.

Current Outlook: neutral