Mortgage Rate Update March 31, 2014

This morning the dynamic in the interest rate market is opposite of what I had reported on Thursday last week (yield curve grew steeper this morning).  This is because Janet Yellen is all of a sudden signing a different tune.

Speaking to a conference on community investment Fed Chairwoman Janet Yellen painted a relatively grim outlook on the labor market.

Her emphasis on the negative aspects of the nations outlook for jobs is being interpreted as a clue that the Fed may not begin to raise short-term interest rates as quickly as indicated in the post-monetary policy meeting.  On a related note, HERE IS Oregon’s latest forecast on job creation.

Normally bad news for the economy is good news for mortgage rates but this morning’s news is boosting stock prices and negatively effecting rates (companies stand to make more profits with lower short-term interest rates).

This week is jobs report week so we’ll get the ADP version Wednesday, jobless claims on Thursday, and the all-important jobs report on Friday.  The markets are currently expecting 193,000 new jobs created for the month of March.  This would make for the healthiest month of job creation since November of 2013.

From a technical perspective mortgage rates appear to be bound inside a .125-.25% range.  The longer interest rates trade inside this range the more likely a “break-out” will take place where rates move sharply one way or the other.

For now, I will maintain a locking bias.

Current Outlook: locking