Mortgage Rate Update May 5, 2014

Mortgage rates are unchanged from late last week despite the stronger than expected headline from the all-important jobs report.

Friday’s monthly jobs report for April showed that the economy created 288,000 new positions.  This was higher than what analysts had expected yet mortgage rates did not worsen like we would have predicted.

Why didn’t rates rise on the news?  In fact the workforce shrunk AND many of the new jobs were credited towards statistical assumptions which may or may not prove accurate.

The economic calendar is light this week compared to last week.  Interest rates will likely react to technical trading patterns and developments out of Ukraine.

From a technical perspective we’re keeping a close eye on the US 10-year treasury yield.  It currently sits at 2.58% and we’re waiting to see if it will fall down to the lows from October of 2013 at 2.47%.  If so, I expect rates to improve by another .125%.

However, we need to be careful because any sign of hope with regard to the conflict between Ukraine and Russia would unwind the flight-to-safety trade and pressure rates higher.

Current Outlook: cautiously floating