Mortgage Rate Update August 8, 2016

Mortgage rates are slightly worse as compared to last week.

Friday’s all-important jobs report was stronger than anticipated.  The report showed that +255,000 new jobs were created during the month of July and they revised higher the previously released number for June to +292,000.  Good news for the employment market tends to be bad news for interest rates.

A second consecutive month of strong jobs gains makes it more likely that the Fed will hike rates again at an upcoming meeting.  I personally don’t see them hiking rates prior to the election but won’t be surprised if they do so at the December meeting.  The Fed does not directly control mortgage rates but their words and actions do reverberate across the financial landscape.

The economic calendar for this week is light as compared to last week.  As a result, I expect mortgage rates to react to technical signals and the stock market.  Speaking of the stock market, don’t look now but eh S&P 500 is trading at all-time highs.

portland mortgage broker SP500

After trading within a narrow range of 2,106-2,175 for three weeks Friday’s jobs report provided catalyst for the index to break higher.  Should stocks break higher it would be a bad sign for mortgage rates.  If the S&P 500 is sucked back below 2,175 then I’ll be a little more optimistic about mortgage rates.

Current Outlook: locking bias