Mortgage Rates Continue to Hold Steady

Mortgage rates are unchanged this morning, as it is setting up to be another quiet session as markets await the FOMC meeting next week and the ECB meeting tomorrow. There has been no new driving news since last week and there is not anything today. Weekly MBA mortgage applications were released this morning, slightly weaker with rates notching up a little. It was reported that Mortgage rates rebounded from three-year lows, with the average rate for 30-year fixed-rate mortgages on conforming loans ($417,000 or less) rising to 3.65%, but of course, there is never indication there on how fees affect the rates on the retail market.

In this morning’s WSJ an article on the front page once again calling into question that the Fed will move again this year. Nothing new that makes that anything more than filling space as it has been the same rhetoric since last December. Yellen is still data dependent but the data is improving somewhat. The Fed badly wants to do it and the hawks are gaining some ground. Inflation has not increased much and is still below the Fed’s 2.0% target depending on what inflation gauge one looks at, nevertheless there is an inordinate fear that inflation is just around the corner and the Fed would like to get ahead of it. Tilting at those windmills - it is unlikely inflation will increase to a concerning level given the slow, snail like, global growth.

Tomorrow’s ECB meeting is not likely to change policy but there is betting the bank will signal more stimulus in September. Investors betting there will be more central bank intervention to fuel more increases in equity markets. So far the best everyone can take away from all of the central bank interventions and stimuli has been just keeping the global economy from dropping into deep recessions. Better that than nothing at all but each notch higher in stocks is being built on very high optimism that has not occurred yet. The Bank of Japan is due to meet next week amid heightened speculation about fresh rounds of monetary and fiscal easing.

Once again today nothing on the horizon that should push mortgage rates significantly higher or lower, so right now the word is caution, unless you are ready to close in the next 15 days, then the wise choice is to lock. The 10yr has touched 1.60% today, but is now at 1.59% with negative readings on the MBSs.