2019 began the year with rates near 12-month lows and they managed to drop further. Volatility was also down in January as some of the uncertainty regarding the government shutdown and trade wars seems to have tamed.
Markets have been pushing mortgage rates sideways to slightly higher so far this year and last week was no exception, 30 year rates ended higher while 15 year rates ended lower. Every other day mortgage rates switched from rising to falling and next week will likely be just as bad or worse. Still, opposing forces are pushing and pulling daily. Domestically, weekly initial jobless claims hit a low not seen since the 60’s which still indicates strength in our economy. Tie that with the recent, more accommodating position that the Fed is taking and there is reason to believe our economy will remain strong. However, on a global level, the economic slowdown and forecasts are not as positive.
So you have some investors in a “risk on” position while many others are in a “risk off” position in anticipation of the global slowdown continuing. This uncertainty is causing volatility in the markets and this will continue in the near term. The Fed meets next week which should give some guidance, but we are recommending watching closely with intentions of locking at the lowest points for purchases closing within the next 45 or so days and floating further out. As always, this is a moving target so make sure you are working with a mortgage professional who understands the markets.