Mortgage Rate Update April 14, 2016

We had switched to a locking bias on Monday and that has proven to be the right call.  Mortgage rates have worsened very mildly since Monday.  This statement will contradict what you’ll hear from the media over the next couple days.

The Freddie Mac Primary Market Survey, which is what major media outlets tune into, was released today and showed that rates dipped slightly from last week.  Freddie Mac’s survey lags the market.

Lenders voluntarily submit interest rate information Monday-Wednesday of every week and then Freddie Mac releases the results on Thursday.  The results today simply show that mortgage rates were lower this Monday-Wednesday as compared to last Monday-Wednesday.  Unless rates move lower Monday-Wednesday next week next Thursday’s report will confirm that rates have worsened slightly.

Looking at the markets, the Consumer Price Index (CPI) was released today by the Labor Department and it continues a trend of tepid inflationary pressure.  This is friendly news for mortgage rates as inflation is the nemesis of long-term interest rates.

In a separate report weekly jobless claims matched the lowest level in over 40 years.  This is a positive sign for the economy which tends to be bad news for mortgage rates but at this point rates have not reacted.

From a technical perspective the US 10yr treasury yield and mortgage-backed bonds are trading at important levels after worsening over the last 3 days.  I am cautiously optimistic that they will catch technical support and rates will return to the levels we had at the beginning of this week.  But we need to be cautious given that rates are very near all-time lows.

Current Outlook: floating bias