Housekeeping Note: ‘Rate Update’ will be on vacation next week and is set to return Monday, August 31st.
Mortgage rates are back at the best levels of 2015.
Mortgage rates improved following the release of the minutes from the last Fed monetary policy meeting. The minutes revealed that Fed officials are divided as to whether or not they should raise short-term interest rates at the next meeting scheduled for September 16th-17th.
The difficulty the Fed finds themselves in has to do with the fact that job growth remains strong and unemployment is low yet inflationary pressure remains soft.
Stock markets around the globe are trading lower this morning on worries over global economic growth. The Shanghai Composite dropped 3.4% earlier, France is down 1.4%, Germany is down 1.2%, and the US markets are opening up down ~1%. Weakness in stocks is often a good sign for mortgage rates.
In housing news, the National Association of Realtors released the existing home sales report for July. It showed that the number of completed sales in the US increased by 10.3% from a year earlier (5.59 million units on an annualized basis). In the west median home prices were up 8.4% from a year earlier.
Technical trading patterns suggest that mortgage-backed bonds are overbought which is a signal rates may reverse higher. I recommend locking in.
Current Outlook: locking