Another tough week as mortgage rates continue to rise. This has been in part due to bond yields increasing globally, which had been acting to keep US yields lower. In addition, US stock markets are rallying to levels not seen in many months which is also weighing on bonds.
The Fed is meeting next week as well and it is widely believed that they will be raising the Fed rate by .25%. It will be interesting to hear what the Fed has to say, but there is very little expectation that it will be good news for mortgage rates. Both the fundamentals and technical analysis are indicating that the trend of raising interest rates will continue, but we may be due for some pull backs soon. As always, make sure you are working with a mortgage lender who knows the mortgage market.
New mortgage applications fell again in August as well as in Q2, which may not be a surprise, but what might be is that the total mortgage balances across the country are now nearing the record highs seen in 2008. Rising interest rates will likely continue to stifle new applications and may help level the housing market from a sellers market to something more neutral. We will keep you posted.
As always, If you have any specific questions or scenarios you would like to discuss, I am always happy to help!