Mortgage Rate Talking Points 02/2017

  • After testing their all-time lows in July, rates trended higher during the latter part of the Presidential campaign season then rushed to new 18 month highs immediately following the election.
  • Bond investors are increasingly wary (some are convinced) that the DECADES-long trend to lower rates is now over. While confirmation of this is impossible, market psychology is defensive in anticipation of higher rates ahead.
  • The Trump administration's stated fiscal policies are a contributor to the upward rate momentum, however, the markets have paused and been relatively stable within a range in the low 4's for the past 10 weeks.
  • It is worth noting that rates are below their 2016 high and that despite firm economic reports the Federal Reserve appears hesitant to raise rates pending clarity on the new administration's fiscal policies.

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