Mortgage update January 24th, 2019

Rates have been testing current support levels and hanging in nicely.  Currently, rates are following the direction of the stock market. A stock sell off causing improvement in rates and vice versa, as money flows out of one market and into the other.

Keeping an eye on those key factors that could move rates that I mentioned in my last update: There was a moment last week when the markets became optimistic about a trade deal but that was quickly reversed.  It is going to take some time for two countries with completely different ideologies to come together and agree on terms moving forward. But with China seeing the slowest growth since 1990, they may be willing to make some compromises.  Speaking of slowdown in growth, the global growth outlook for 2019/2020 still weighing heavily on markets helping our rate position. November/December housing reports rolling out now showing a softening housing market. The stock market volatility likely played a part in that, along with the effect of normal seasonal slowdown. However, mortgage apps have been on the rise since the first of the year pointing towards a good spring purchase season which should be supported by our now better pricing.

What to watch: Expect a hit to the rates on the immediate news the shutdown has ended.  This may reverse back once the economic impact of the shutdown becomes known, but it is anyone’s guess at this point.  Lots of support at the moment for rates to remain lower for longer.

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