We saw flat to slightly lower mortgage rates this week as equity markets continue to climb from their Christmas Eve lows. The S&P 500 is up over 10% since then and key economic indicators continue to beat expectations, despite the government shutdown.
The temporary three week reopening of the government gives our government workers some relief and hopefully our lawmakers can hammer out a deal to keep the government open beyond the February 15th deadline. Approximately 800,000 federal workers have been furloughed or working without pay since the shut down over a month earlier. In addition, many non-government workers have had their home purchase process delayed due to the shutdown. Government mortgage programs, such as USDA, FHA, and VA mortgages have been challenging for borrowers during the shutdown as well.
The Fed also met this week and indicated that they would not be raising rates during this secession. Fed Chair Powell continues his more recent dovish tone regarding any additional rate hikes in the near term as inflation remains stable. We anticipate no rates changes by the Fed in the near term, but are watching closely as the global markets continue to slow and how this will impact our own domestic markets and ultimately how it affects mortgage interest rates.