Mortgage Rate Update January 13, 2014

In case you missed it Friday’s all-important jobs report was a miss which is why mortgage rates are at the best levels since the beginning of December (click HERE to understand why).

The report released by the Bureau of Labor Statistics indicated that only 74,000 new jobs were created in the US economy during the month of December. Most analysts had been expecting a figure near 200,000.

The weaker than expected report raises the question of whether or not the Fed will slow the pace of tapering its quantitative easing policy which is designed to keep long-term interest rates low. If so, this would be good news for mortgage rates. However, I don’t believe the Fed will alter its course unless next months report is also weak. We will likely learn more about the Fed’s stance this week because 7 Fed officials are schedule to speak across the country Tuesday-Friday.

In addition to that the economic calendar is full of significant economic data including reads on retails sales (Tuesday), inflation (Wednesday-Thursday), and economic activity (Wednesday-Thursday), and building (Friday).

From a technical perspective mortgage-backed bonds are battling resistance at the 50-day and 100-day moving averages. I realize I prematurely called for a locking stanc3e last Thursday but I am going to stick with it now that we’ve experienced these gains.

Current Outlook: locking