Stocks and Mortgage Rates Rise

Last Week in Review: Stocks and Mortgage Rates Rise

This past week home loan rates ticked up sharply from the previous week leaving many wondering -- have rates bottomed?

For would-be homebuyers, real estate agents, and folks working in the housing industry, here are three things affecting home loan rates today and stories to follow in coming weeks and months. Which way these things go will determine the next directional move for home loan rates:

1. U.S./China Trade Dispute: In recent weeks both sides have played "nice" with tariffs being delayed by the U.S. and China opening markets. How this story goes, so will global economies, financial markets, and home loan rates. At the moment, there is no bigger story to track.
2. Tug of War: The push/pull action between slowing global economies and world central banks is at play. With economies slowing, central banks are cutting rates and introducing new financial stimulus to keep the economic expansion growing. If central banks are successful and economic growth reaccelerates, home loan rates will suffer further. The opposite is also true.
3. The "Technical Picture": It has turned against home loan rates for now. Back on August 5, Mortgage Bonds hit a 2019 price high and have been unable to break above that price, and subsequently slipped lower creating a tough "ceiling of resistance" that Bonds will have to pierce in order for home loan rates to further improve.

Bottom line: The recent uptick in rates could simply be a blip on the radar and we may see home loan rates hit all-time lows in the months ahead. As mentioned, the bullets above will determine what happens next. With rates remaining near three-year lows, would-be buyers and folks looking to refinance should capture the opportunity while at hand because there could be a high cost and risk to waiting for rates to go even lower.