Mortgage Rate Update December 9, 2013
Mortgage rates are unchanged to slightly better this morning.
Friday’s all-important monthly jobs report showed 203,000 new jobs created during the month of November. This was better than expected but contrary to a typical market reaction mortgage rates actually stabilized and some loan programs even improved. This is likely due to the fact that rates had worsened last Wednesday so a stronger figure was already “baked in”.
Since August of this year the US economy has added over 800,000 new jobs and the unemployment rate is now down to 7%. 
The recent strength in the employment markets suggests that the Fed will begin to taper quantitative easing (QE) which is designed to keep long-term interest rates low. How soon will they do this? Some think they could announce plans at the next monetary policy meeting scheduled for next week but still believe they’ll hold off until January.
The economic calendar is light this week so I expect mortgage rates to react to technical trading patterns and the stock market. Based on technical signals we can afford to float this morning but mortgage-backed bond (MBS) prices are approaching a layer of resistance at 104. If MBS prices get tripped up at this level then I would expect rates to march higher.
Current Outlook: cautiously floating