Last Week in Review: Summer Sideways Trend Continues
This past week had little economic data for the financial markets to react to. As a result, home loan rates have inched higher though they remain near multi-year lows.
It's pretty easy to see the sideways trend in mortgage Bonds and the reason why home loans have stabilized since the beginning of June.
It is normal to see quiet sideways trading action in the summer months, especially with the U.S./China trade war punting into the future and the Fed about to cut rates at month's end. Traders are more apt to sit on their hands and wait for the next directional move in the financial markets.
What should we expect next for home loan rates? Volatility. Long, boring and complacent sideways trading patterns like we are seeing in mortgage Bonds are typically followed by an increase in volatility, and a sharp breakout one way or the other.
How mortgage Bonds respond to the Fed Statement and rate cut on July 31 may very well determine the next directional move in home loan rates.
Bottom line: anyone looking to either refinance or purchase a home ... being ready to lock in the next couple of weeks would be wise. A Fed rate cut doesn't guarantee that home loan rates will move lower. In fact, ever since the probability of a Fed rate cut hit 100%, home loan rates ticked up a bit.
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