Mortgage Rates Continue Higher

Mortgage rates continued to go a bit higher today, but not as drastic as it started late last week.  Unfortunately, we are now at the highest levels we have seen since the UK voted to leave the EU ("Brexit" - the last major source of downward pressure on interest rates).

Today we had a number of FEDSPEAK come out from various people, and it was truthfully amazing to see the uneasiness in all of their comments – not so bullish, but still trying to be heard. Looks now that the markets, after trading in very narrow ranges for over two months succumbed to selling that broke the ranges and that added more selling.

Trying to accurately handicap the Fed or the ECB, or for that matter the Bank of Japan and the Bank of China is a fool’s errand. That said, the bond market did suffer technical damage breaking out of the 1.50% - 1.60% range no matter the present debate over the Fed. Market action should always take precedent over the constant mixed messages from the Fed or market pundits. Unless the 10yr drives back below 1.60% in the next day or two a new higher yield range may develop. 1.60% yield on the 10yr is now technical resistance from what was support.  Not much data until Thursday, so the next few days will follow what is going on overseas and the auctions.

In summary, the good news from today is that the markets have not continued last week's sell-off.  The bad news, sadly, is they have not recoup any of them either.  It is both predictable and frustrating when Fed members drop nuggets touting economic recovery (as happened Friday), then other members then mention tepid economic data (as happened today).  Until I see confirmation that our upward rate trend has ended, I would recommend locking most loans sooner than later.  I would rather lock and be wrong, than float and be wrong, and right now, rates do not know where they want to go.