Mortgage Rate Update June 6, 2016

Mortgage rates have reverted to the best levels in three years following Friday’s all-important jobs report.

The markets were expecting Friday’s jobs report to show 155,000 new jobs created.  However, it showed that only 38,000 were added to the US economy in May. This is the weakest output in five years.  Bad news for the economy is good news for interest rates.  Speaking today, Fed chairwoman Janet Yellen communicated that a June rate hike was less probable.  According to CME Group there is currently a 6% chance the Fed hikes short-term interest rates in June.

This week’s economic calendar is pretty light.  Therefore, I expect mortgage rates to react to technical trading patterns and the stock market.

From a technical perspective mortgage rates are as good as they’ve been for 3 years.  I think borrowers have more to lose than to gain by not locking in at these levels.

US stocks have already recovered from Friday’s losses as investors forecast how lower interest rates will impact future corporate earnings.

I will maintain a locking bias.

Current Outlook: locking