Mortgage rates remain unchanged.
Despite a rally in the stock market during the month of October mortgage rates have essentially remained flat. The S&P 500 index hit a recent low of ~1,880 back on September 28th. Since then the index has increased by 10%. Normally we would expect mortgage rates to worsen when stocks strengthen but that has not been the case.
From a technical perspective US stocks look overbought which means we may see them reverse and move lower in the near-term. That said, since mortgage rates didn’t worsen while stocks accelerated I don’t necessarily think they will improve if stocks do decline.
There’s a lot going on this week in the financial markets. The Fed is scheduled to meet Tuesday-Wednesday. It is not expected that the Fed will raise rates at this meeting but as always the wording in their monetary policy statement can always create volatility.
After a blockbuster report in August new home sales softened in September. In other housing news the Case-Shiller Home Price Index is scheduled to be released on Tuesday and pending home sales on Thursday.
Lastly, we’ll get a look at personal income and the Personal Consumption Expenditure price index on Thursday. We expect inflationary pressure to remain tame which is good for mortgage rates.
Current Outlook: floating