Mortgage Rate Update October 17, 2016

Although mortgage rates remain at historically attractive levels October has been a rough month for interest rates.

Looking back to June 23rd which is when Britain voted to exit the European Union interest rates slipped as investors sought safe haven for their capital.  By mid-July interest rates had given up half of the gains.  From mid-July to late September interest rates traded sideways for most of the time.

Over the past couple weeks interest rates have begun to creep higher.  Why?  There is a growing belief that the Fed, and other central banks around the world, may become less combative against inflationary pressure.  Inflation is the primary driver of mortgage rates.

Furthermore, there is growing recognition that large scale quantitative easing measures are also likely coming to an end.  These policies drive interest rates lower because it involves central banks buying massive amounts of bonds.

From a technical perspective interest rates are trending higher and now have support levels below current levels.  The picture is not conducive to lower rates.

Current Outlook: locking bias