Mortgage rates are back to the best levels for the year.
In case you missed it Thursday’s much anticipated Fed announcement was a boon for mortgage rates. The Fed voted to leave short-term rates unchanged and made dovish comments about near-term monetary policy.
In the post-announcement press conference Chairwoman Janet Yellen voiced concerns about the health of the global economy and the potential impact on US inflation. Inflation in the US remains below the Fed’s target of 2% and they would like to see prices rise consistently before they raise rates.
The next Fed meeting is October 27th-28th and the markets don’t believe the Fed will hike then either.
The economic calendar is full of housing data this week. Earlier today the National Association of Realtors released its monthly reading on existing home sales. The number of home sales declined last month due to tighter inventories. Let’s not forget that existing home sales hit an 8-year high in July so a miss in August is not a huge surprise.
On Tuesday the Federal Housing Finance Agency releases their version of the national Housing Price Index, on Thursday we’ll get a reading on new homes sales, and on Friday we’ll get consumer sentiment.
From a technical perspective I am concerned about the current level of rates. Mortgage rates improved in a knee-jerk reaction following the Fed’s announcement last week. I think we have more to lose than to gain so am recommending a locking position.
Current Outlook: locking