Mortgage Rate Update July 19, 2016

‘Rate Update’ woke up late this week so we’re debuting on Tuesday instead of yesterday.  Mortgage rates are unchanged from Thursday of last week.

The economic calendar is fairly light this week though the limited number of releases are heavily housing focused.  Earlier today the latest reading for housing permits and housing starts was released.  Housing starts were up a healthy 4.8% from a month earlier and housing permits also rose modestly.  The modest increase is a welcome sign for those concerned about an overheating real estate market.  Existing home sales will be reported on Thursday.

New construction is ticking along at a very healthy pace.
New construction is ticking along at a very healthy pace.

Mortgage rates have risen ~.125% off the all-time lows created directly following the ‘Brexit’ vote.  From a technical perspective mortgage rates have plenty of support at present levels and I would not be surprised to see rates regain a .125% improvement in the next week.

The Fed is scheduled to meet later this month on the 26th-27th.  There is virtually no chance the Fed hikes rates at the July meeting.  However, the Wall Street Journal is reporting this morning that the Fed is likely to hike short-term rates later this year.  As a reminder the Fed does not directly control mortgage rates but their comments can have an indirect impact.

I am going to recommend a floating bias.

Current Outlook: floating