Mortgage Rate Update October 2, 2017

It is with a heavy heart that we acknowledge the horrible shootings in Las Vegas this morning.  It is my hope that our leaders can act in a meaningful manner to prevent these events in the future.  That is the greatest honor we can pay the victims.

Mortgage rates were mostly steady last week.  Mortgage note rates are unchanged but the underlying pricing worsened meaning consumers are having to pay modestly higher closing costs at these rates.

Given the shootings in Las Vegas investors are feeling understandably cautious.  Also fueling this sentiment is a non-legally binding vote in Spain.  Voters in the Catalonia region have voted overwhelming to secede from Spain.  The Spanish Federal Government is not required to accept the results.  Uncertainty tends to help US interest rates remain low.

Working in the opposite direction is the GOP tax plan.  As the tax legislation currently stands over $1 trillion would be added to the US deficit in the next decade.  Higher US deficits “crowd-out” non-governmental borrowers (including homebuyers) and causes rates to move higher.

It is the first week of a new month which means the all-important jobs report is due out on Friday.  Market expectations are only for 95,000 new jobs as the recent hurricanes are expected to have taken a toll on new hiring.

I think mortgage rates have a greater likelihood of increasing from current levels than decreasing so recommend a locking bias.

Current Outlook: locking