Mortgage Rate Update June 23, 2016

After hitting 3-year low levels a week and a half ago mortgage rates have risen by ~.125%.  Essentially mortgage rates have correlated perfectly with sentiment surrounding the British vote on whether to remain or separate from the European Union.

The polls are currently open as British citizens cast their votes.  Odds makers are currently saying there is a 70% chance Britain will remain in the EU and 30% chance a “Brexit” takes place.  Election laws in Britain prohibit publicizing early results so we will not know until all the polls have closed later today.

Given the uncertainty surrounding a potential “Brexit” US mortgage rates have benefited recently when sentiment has shifted towards that outcome.  Therefore, intuition would tell us that if Britain stays in the EU mortgage rates may rise.  However, over the past week US mortgage rates have worsened by ~.125% so it is my belief that the status quo is priced in.

The British vote is overshadowing all other economic news at this point.  Although I think the outcome of the referendum will be that Britain remains in the EU I think we can float our interest rates.

Current Outlook: floating