Mortgage Rate Update April 26, 2011

Mortgage rates are priced slightly better this morning.

I expect mortgage rates to hold at current levels until the conclusion of the Fed monetary policy meeting tomorrow.  It is widely expected that the Fed will leave short-term interest rates unchanged but analysts will listening for cues on the Fed’s economic outlook & future policy moves.

Only 2 weeks ago interest rates climbed on growing fears about inflation but today the markets are focused on the economy’s sluggish recovery and how the Fed may act to further stimulate activity.

Despite the gloomy outlook for the economy consumers were more confident than expected in April.  The Conference Board’s monthly index showed that consumers outlook grew rosier and their inflation expectations were subdued.

The S&P Case-Shiller Home Price Index report showed that homes prices continued to slide on a year over-over-year basis in February.  Because the data is 2 months old the markets to pay a lot of attention to this report.

Pricing on mortgage rates have improved on 8 of the past 10 trading days which leads me to be concerned about technical trading patterns.  I will maintain a locking bias.

Current Outlook: Locking