Mortgage rates remain at historically low levels following Britain’s historic “Brexit” vote which took place one week ago.
The financial markets are still trying to digest the news and forecast how the next few years will play out. With the British pound suffering against the US Dollar investors are growing increasingly concerned about the health of the British banking system. US mortgage rates benefit whenever there is widespread fear in the global marketplace.
The question many people want to know if will rates remain at these levels? Will they reverse higher? Will they continue to trend lower? As always this is a very difficult question to answer but momentum is definitely on our side.
Furthermore, professional investors think rates in the US will continue to improve. Hedge funds and money managers currently hold the highest level of derivative securities which pay-out when rates improve since 2013. JP Morgan Chase released results of a survey of investors Tuesday which showed the highest number of respondents who think rates will improve since 2010. Not that a majority of professional investors can’t be wrong (have you seen “The Big Short”?) but this is fairly compelling evidence that rates should at least remain at these levels for the time being.
In case you missed it Portland led the nation for the seventh straight month in terms of annual home price appreciation. According to the Case-Shiller Home Price Index home prices rose by 12.3% from April 2015-April 2016.
I am going to maintain a floating bias.
Current Outlook: floating