Mortgage Rate Update November 12, 2015

Mortgage rates are unchanged from the beginning of this week.

As I wrote on Monday I don’t believe it is any coincidence that markets presently believe the Fed is likely to raise short-term interest rates by .25% at the Dec. 15th-16th meeting and mortgage rates have increased by .25% over the past couple weeks.  Speaking of the Fed Janet Yellen is scheduled to speak later today and her comments can always impact the direction of rates.

The question I have is will rates continue to trend higher?  At the beginning of this week momentum in the interest rate markets led me to believe that it could very well be the case.  However, interest rates stabilized on Tuesday and the bond market was closed on Wednesday in recognition of Veteran’s Day.

At this point I don’t see a catalyst in the near-term that would cause mortgage rates to improve.  Sentiment has changed in the interest rate markets and is not favorable for rates moving lower at least in the near-term.

From a technical perspective mortgage rates would need to increase by another .125% to match 2015 highs. Whether or not this happens in the near-term may have to do with the yield on the US 10-year treasury note.  It is currently trading at an important technical layer @ 2.33%. A close above this level would  be a bad sign.

For now, I think the safe play is to take the long-term historical perspective and recognize on a historical scale rates below 4.5% are damn good.  I will maintain a locking bias but won;t be surprised if rates hang around these levels for a little while.

Current Outlook: locking bias