Mortgage Rate Update February 12, 2015

For the most part mortgage rates are more or less unchanged from Monday.

As we’ve said time and time again here on ‘rate update’ bad news for the economy tends to be good news for mortgage rates and vice versa.  Earlier today, the Commerce Department released figures which showed that retail sales here in the US declined by more than expected last month.  This flies in the face of conventional wisdom which suggests that lower gasoline prices should create additional discretionary income for US consumers.  The concern is that economic headwinds stemming from weakness overseas are penetrating our borders.

Mortgage rates tend to oscillate up and down in conjunction with the US 10-year treasury yield.  After hitting a multi-year low of 1.67% on February 2nd the yield has risen to ~2.00% and remained at that level for three days.  The 2.02% level is an extremely important level of technical resistance.

I am hopeful that the US 10-year can hold the 2.02% level and close below that level today.  If so, I would expect mortgage rates to improve .125%-.25% over the next few days.  However, we have to be very careful because should yields push through the 2.02% level it would forecast continued increases in mortgage rates.

I will continue my floating position as long as the US 10-year trades at 2.02% or better.

Our office are closed on Monday on recognition of Presidents Day so the next ‘rate update’ will come out on Tuesday, February 17th.

Current Outlook: floating