Home Loan Rates
I recommended “floating” in last week’s ‘rate update’ and that paid off. Mortgage rates are about .125% lower today than they were a week ago.
Interest rates have improved because optimism surrounding US-China trade talks have subsided. There have not been any new details regarding trade negotiations in the past week and therefore sentiment is turning more pessimistic which is helping US interest rates move modestly lower.
Earlier today the Commerce Department released the latest figures for housing starts and building permits. The figures were stronger than expected and demonstrate that builders are continuing to break ground on new homes.
Ironically, here in the Pacific Northwest the level of residential construction remains historically low relative to in-migration numbers. The result is that home prices and rents continue to rise.
The week ahead
Tomorrow we’ll get minutes from the last Fed meeting. It is expected to show that Fed officials will be on hold from any further short-term interest rate adjustments (CLICK HERE to see why the Fed’s rate cuts don’t matter that much anyways).
On Thursday we’ll get existing home sales from the National Association of Realtors and on Friday we’ll get the latest reading on Consumer Sentiment.
From a technical perspective interest rates appear vulnerable to reverse course and move higher. However, longer-term the stock market also appears over-bought. If we see the US stock market pull back that would be very favorable for mortgage rates.
Current Outlook: locking bias