Mortgage rates are mostly unchanged this morning.
Last week’s surprise announcement from the Fed that they would continue to engage in quantitative easing (QE) has investors recalibrating their outlook on the markets.
On one hand, the long-term outlook is unchanged. The Fed will eventually taper QE and that should put upward pressure on interest rates. On the other hand, the Fed is clearly concerned about the health of the economic recovery following the rise in interest rates that took place over the summer. A weak outlook for the economy is often good for interest rates.
This week’s economic calendar will shed some light on how the rise in interest rates is impacting the housing market. On Wednesday we get an update on new home sales and on Thursday pending home sales is reported. In addition, we get reading on the nation’s Gross Domestic Product and inflation later in the week. The US Treasury is also scheduled to auction $97 billion in fresh US debt.
From a technical perspective mortgage rates are at the best levels of the past 6 weeks. I think there is more risk in floating right now than in locking. Therefore, I will shift to a locking bias.
Current Outlook: locking