Rate Trends

Charts are fascinating to me; every so often the patterns and trends are beautiful and reassuring.  The above graph represents pricing on mortgage portfolios over the last two years. All of the green blotches represent good days and the red, bad days.  Overall, you can see that the trend over the last 18 months has been toward higher pricing, which translates to you and me as lower interest rates. Pricing bounced off of the purple arrow today as mortgage pricing thankfully increased again, pointing to lower interest rates ahead.

The driving factor toward lower rates since mid-September 2013 has been that the economy is not recovering as strongly as our collective herd-mentality thought it was during the summer of that year. And even though interest rates have been creeping up the last two weeks, the data contained in today’s Jobs Report confirms that.

This morning the Bureau of Labor Statistics released the Unemployment Rate at only 5.4%, a low level not seen since 2008.  At first glance that’s fantastic…until you see that 62.7% of Americans are still underemployed and the average hours worked per week is still only 34.5.

Should this purple trend line continue until hitting the top, we’ll see low rates for the next six months or more.