Mortgage rates are unchanged today.
Since last Friday’s disappointing employment report mortgage rates have declined by approximately .25% and US stocks have taken a beating. The Dow Jones Industrial Average is down over 500 points.
It’s not uncommon for markets to reverse course following an acute move like we’ve seen over the past few days and I wouldn’t be surprised if today marks the turning point.
Earlier today Germany failed to draw enough demand for an auction of 10-year bunds which carried the lowest interest rates in over a month. Later today the US Treasury is set to auction $21 billion in 10-year notes. Should this auction also fail to draw significant demand it would likely push mortgage rates higher.
Many analysts believe that the current level of long-term interest rates, including mortgage rates, assumes that the Fed will engage in another round of quantitative easing following the expiration of ‘Operation Twist’ in late June. However, the last explicit communication from the Fed excluded any mention of this. Unless economic data continues to show signs of weakness I think this is as good as we’re going to see. I am shifting my outlook to locking.
Current Outlook: locking