Mortgage Rate Update October 26, 2015

Mortgage rates remain unchanged.

Despite a rally in the stock market during the month of October mortgage rates have essentially remained flat.  The S&P 500 index hit a recent low of ~1,880 back on September 28th.  Since then the index has increased by 10%.  Normally we would expect mortgage rates to worsen when stocks strengthen but that has not been the case.

From a technical perspective US stocks look overbought which means we may see them reverse and move lower in the near-term.  That said, since mortgage rates didn’t worsen while stocks accelerated I don’t necessarily think they will improve if stocks do decline.

There’s a lot going on this week in the financial markets.  The Fed is scheduled to meet Tuesday-Wednesday.  It is not expected that the Fed will raise rates at this meeting but as always the wording in their monetary policy statement can always create volatility.

After a blockbuster report in August new home sales softened in September.  In other housing news the Case-Shiller Home Price Index is scheduled to be released on Tuesday and pending home sales on Thursday.

Lastly, we’ll get a look at personal income and the Personal Consumption Expenditure price index on Thursday.  We expect inflationary pressure to remain tame which is good for mortgage rates.

Current Outlook: floating