Mortgage Rate Update August 1, 2016

Mortgage note rates are mostly unchanged from last week.

It’s a busy week on the economic calendar and ‘rate update’ will not come out on Thursday so I will try and pack it all in here.

The Personal Consumption Expenditure price index (PCE) will be released tomorrow.  The PCE is the Fed’s favorite gauge of inflation and inflation is the primary driver of mortgage rates.  The last reading showed prices increasing by 1.6% year-over-year.  Should inflation pressure tick higher it would be a negative sign for mortgage rates.

Meanwhile, the US 10-year treasury note is locked into a “technical” struggle at ~1.50% which also happens to be the 25-day moving average.

So long as the yield on the US 10-year treasury yield can remain below 1.50% we’ll be in good shape.  A break above would be a bad sign for mortgage rates in the near-term.

The all-important jobs report is scheduled for Friday.  The markets are currently expecting 185,000 new jobs for the month of July.  Stronger job growth would likely push mortgage rates higher and vice versa.

Current Outlook: locking