Mortgage Rate Update May 1, 2014

Mortgage rates are unchanged this week.

Is the economy improving?  Anecdotally many “experts” are suggesting it is.  However, the data is not supporting this view.  According to the Commerce Department’s quarterly reading on Gross Domestic Product the economy only grew at a .1% pace during January-March.  Had imports not declined the reading would have actually gone negative.


Bad news for the economy is good news for mortgage rates.  Also good for mortgage rates is low inflation figures.  The Personal Consumption Price Index, the Fed’s favorite gauge of inflation, grew at a +1.2% pace during the first quarter which is well below the Fed’s target.

Speaking of the Fed, they wrapped up their most recent monetary policy meeting yesterday with no surprises.  They announced they would taper quantitative easing by an additional $10 billion (as expected) and made no change to their outlook for short-term interest rates (as expected).  Ho-hum.

Tomorrow we get the all-important jobs report from the Bureau of Labor Statistics.  Despite the lackluster economic data out this week, expectations are for +~200,000 new jobs created for the month of April.  As is normally the case mortgage rates will likely be pressured higher in the event the report beats expectations and vice versa.

Based on the sources I like to review I think there is a high likelihood tomorrow’s report comes in at 200,000 or better so I will recommend a locking bias.

Current Outlook: locking

The views and opinions expressed in this site are those of the author(s) and do not necessarily reflect the official policy or position of Cherry Creek Mortgage Co., Inc. This is for informational purposes only. This is not a commitment to lend.