Mortgage Rate Update December 1, 2011

Mortgage rates are starting the day priced slightly worse compared to yesterday.

Considering how strongly stocks rallied yesterday I am surprised that mortgage rates did worsen more significantly.  Today, stocks are trading modestly lower while rates are fairly steady.

New claims for unemployment benefits unexpectedly rose last week above the 400,000 mark.  Analysts had been expecting a small decline.  Tomorrow brings the all-important jobs report from the Bureau of Labor Statistics.  The markets are expecting about 140,000 new jobs created in the private sector.  In general a stronger than expected report would push rates higher and vice versa.  However, in the most recent two months the report has been overshadowed by the European Debt Crisis.

Speaking of Europe, both Spain and France led successful bond auctions today boosting optimism that the region will find its way out of the crisis.  In general, optimism regarding the outcome of the European debt crisis will push rates higher here and vice versa.  However, in my view the EU still has a long battle ahead.

Current Outlook: locking bias