Mortgage rates are unchanged today.
Interest rates have held steady, just above all-time low levels, for the past couple weeks now. The WSJ published this quote from a trader this morning which sums up the current state of the interest rate markets, “We are at yield levels that require a constant flow of fear to hold.“
The direction of interest rates next week are likely to be impacted by two things. First, as I explained in yesterday’s ‘rate update’ this weekend’s presidential elections in France could have an effect on mortgage rates here in the US. Click HERE to understand how.
Second, the Federal Reserve Open Market Committee (AKA “the Fed”) has their regularly scheduled monetary policy meeting early next week. If you’ll remember back to their meeting 6 weeks ago the Fed DID NOT make any mention of plans to extend quantitative easing (designed to keep long-term interest rates low) beyond the end of June 30th. However, since then the economic outlook has softened here in the US and the Euro-zone debt crisis has reemerged.
As the aforementioned quote suggests, the current level of rates assumes that the Fed will likely extend quantitative easing programs to help ensure the economic recovery stays on track. Should the Fed exclude any comment of this in their statement next week I foresee rates increasing by .125%-.25%. Given that I don’t think rates have much room to improve I am shifting to a locking bias.
Current Outlook: locking bias