Rates Near Multi-Year Lows

Mortgage bonds have cycled back up to the top of their trading range, which is a ceiling of resistance that has held mortgage interest rates back from improving since last October.  Prices have made many attempts in recent weeks to surpass this seemingly unformidable ceiling, only to be pushed lower.  If prices happen to muster the strength to break this ceiling, they would be approaching multi-year lows in mortgage interest rate pricing.  However, the difference between where rates are now and the multi-year lows we saw last summer isn’t enough for most to justify taking the “wait and see” approach.  Rates are incredible right now.

The US and China are expected to sign their phase one trade deal today, which has stock investors again driving stock prices higher.  I think stocks are now at a vulnerable point, at least in the near term.  I believe they are due for a short-term rest, which could happen after the hype surrounding the initial trade deal dies down.  That would generally be good news for mortgage interest rates and could offer the support needed to maintain rates where they are right now a bit longer.

Given the ceiling that remains, we will maintain our locking bias.