Over the past two weeks mortgage rates have increased by approximately .25%-.50% depending on the loan program. Concerns over inflation have been the main culprit. This morning news surrounding inflation topics continue to create headlines.
Crude oil prices rose to $139.89/ barrel this morning which will continue to put price pressure on every corner of our economy. Furthermore, the Euro Zone reported higher than expected inflation for May. Inflation overseas can negatively impact the demand for our long-term bonds domestically which is why this report is important.
From a technical standpoint mortgage-backed bond prices stand at multi-year lows. Last time prices reached this level they reversed and rallied higher, pushing mortgage rates back down. This scenario could play out again.
Current Outlook: neutral