Mortgage Rate Update September 15, 2016

Mortgage rates remain unchanged from Monday.  In case you missed it mortgage rates rose by ~.125% the latter half of last week.

The economic calendar was full of significant releases today.

First off, retail sales softened during the month of August declining by .3%.  This was a larger decline that analysts had expected and is raising concerns about the health of the economy moving forward.  This report also increases the likelihood that the Fed will not hike short-term interest rates next week.  More on that below.

The Labor Department released the latest Producer Price Index, which measures inflation at the wholesale level of our economy.  On a year-over-year basis prices only increased by 1.2% when excluding volatile food & energy prices.  This is considered to be tepid inflationary pressure which is good for mortgage rates.  The Consumer Price Index will be released tomorrow.

Lastly, weekly jobless claims ticked up slightly last week.  The number of people filing for unemployment benefits remains at relatively low levels but the increase signals a potential change in trend.

All in all interest rates are not reacting to the onslaught of data released today.  Attention remains focused on next week when the US Federal Reserve and Bank of Japan (central bank of Japan) will deliver monetary policy decisions on Wednesday.  I do not think the Fed will raise rates but if they intend on hiking in December I expect them to deliver a signal to the markets.

Current Outlook: neutral