Mortgage Rate Update January 22, 2015

Although mortgage note rates are unchanged from Tuesday the accompanying closing costs are slightly worse.

As I wrote earlier in the week (HERE) the European Central Bank (ECB) made an important announcement today outlining their plans to boost “quantitative easing” (QE) measures with the goal of stimulating their economy.  ECB President Mario Draghi unveiled a plan to purchase €60 billion per month in government bonds beginning in March and concluding in the fall of 2016.

The financial markets were volatile this morning following the announcement partly because there were some details left out of the announcement.  What is unclear is how much the ECB is currently purchasing and how much the new plan will add to existing monetary stimulus.  Here in the US the stock market is trading higher and mortgage rates are priced modestly worst.

In housing news, the Federal Housing Finance Agency, overseers of Fannie Mae & Freddie Mac, released their monthly house price index earlier today.  It showed that home prices increased by 5.3% nationwide and 7.5% in the Pacific Region (includes Oregon).

Looking ahead there are some analysts calling for mortgage rates to move lower in February.  However, in the meantime I can see a case for rates to worsen from current levels.  If an applicant has time it’s probably worth it to float but if a customer is closing in the next two weeks I would recommend locking.

Current Outlook: locking for closings in the next 20 days, floating long-term.