Key factors helping mortgage rates

Mortgage rates are still holding onto the lows we have seen for the past couple of months. Uncertainty is a friend to keeping mortgage rates lower, and we have plenty of that to go around. 

Here are some of the key factors affecting mortgage rates right now:

1. The government shut down is starting to weigh on the economy as it drags on.  A resolution on the shut down will most likely relieve some of the uncertainty that is currently supporting current rates.
2. Brexit will be one of the main economic stories in 2019, just today May’s Brexit deal was shot down and now her position is at risk again.  This is something markets are watching closely. The UK is the 5^th largest economy in the world.  If they are successful in leaving the EU, it is likely other countries will follow suite and leave the EU as well.
3. Trade negotiations continue…
4. Corporate earnings being released this week as well and market movers are watching this closely for clues on the near term economic outlook.
5. Today PPI report shows slightly lower inflation.  Inflation is one of the key data points the Fed watches when deciding to raise or lower its rate. Good news for rates. 
6. Globally, most feel 2019 will show slower economic growth, this is supportive of lower rates.
7. Fed has turned decidedly more accommodative to the markets, stating they will be patient and watch before raising rates any more.  The softening of this stance is also providing some support to mortgage rates.
8. Several key economic reports have been delayed with the shutdown, when it reopens, there may be some reaction to the reports as the market digests the information.

I am hearing that the spring housing market will come early this year as people take advantage of the rates. As you can see from the list above, we have quite a bit of support for rates to stay relatively low for the time being.  A change in any of these factors will be what to watch for on the future direction for mortgage rates.

* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.