Mortgage Rates Exceptionally Quiet

Mortgage rates have been locked in an exceptionally narrow range for most of the month of June, but during this past few days since the end of the Fed meeting, there has been very little movement whatsoever. The absence of change continues to be a good thing given that rates remain very close to their lowest levels in more than 8 months.  Only a handful of recent days have been any better. 

 This morning May existing home sales finally had a better read than in April and March. Gains for single-family homes, up 1.0 percent to a 4.980 million rate.  The median price rose 3.2 percent to $252,800. Year-on-year, the median is up 5.8 percent and shows seller strength relative to a 2.7 percent gain for on-year sales. Supply are increasing strength in prices, and this is moving into the market.

Crude oil keeps falling, now in a technical bear market (having declined more than 20% from the recent high). Throughout this year the price has declined, all that optimistic talk from OPEC did not amount to much as I have mentioned numerous times here.

United States and China began a day of talks in Washington today looking for ways to press North Korea to give up its nuclear and missile programs. Not likely to end with anything that will have any market impact. North Korea is a pot steaming but not yet boiling as far as US and global markets are concerned now, but no one is brushing it under the hardwood floor.

Floating is getting us nowhere. Still longer term bullish technically - fundamentals though have not been as soft and geo-political issues not boiling. The decline in energy prices is a support as inflation fears ebb.

In summary, bonds continue to hold in the current range.   With the range holding and bonds in the middle of the channel, I still believe it is worth the risk to float.