Mortgage rates are going. Positively. Nowhere.
And that’s a heck of a lot better than negatively nowhere.
Once again, mortgage rates—and basically all forms of standardized interest rates—are traveling sideways. Not up, not down, and that makes reading a weekly column such as this one somewhat boring. And, to quote Millennials (who should potentially be looking for a home right now because of these very trends in the market), “sorry, not sorry.”
“We keep talking about how boring the range mortgage rates have been trapped in for about a month, but we fail to realize how blessed we are that we are trapped in this range,” said Constantine Floropoulos, vice president at The Federal Savings Bank. “Rates are only a .25% above all time lows. Locking in is an easy decision here. Many of us believe we are still yet to see the lowest of the lows, but timing is the question.”
Maybe we’re overly optimistic, but the current trends suggest that even better things may be on the horizon. Historically, after extended periods of sideways movement, there tends to be a more dramatic move in one direction (or the other). And, if you believe what Mr. Floropoulos says, then he believes that rates could drop even further to “the lowest of the lows.” Considering the historic levels of static activity in the market—the last 90 days have been the most stable in tracking history—it’s worth hoping that the dramatic action will be even more drastic than usual.
Granted, none of this fire happens without a little bit of tinder. The question is what will provide the spark. Right now, analysts are suggesting that it may come in the form of Federal Chairwoman Janet Yellen’s scheduled speech for Friday, from the not-so-economic capital of Jackson Hole, WY.
Many expect her to give a noncommittal answer, which is to say that she’ll leave the option for a September rise on the table…without actually saying so. Many expect The Fed to keep an eye on ongoing European Union decisions as well as those for the Bank of Japan before the American team makes any dramatic decisions.