Mortgage Rate Update February 2, 2011

Mortgage rates are worse this morning.

After 8 days of nonviolent protest in Egypt demonstrations took a turn for the worse today as pro-government supporters clashed with anti-government demonstrators.  Geopolitical tension typically creates demand for relatively “safe” US debt instruments which helps push yields lower but thus far the markets here at home have not reacted.

Rates may be hesitant to move lower following this mornings payroll report from ADP.  The report, which is always released the Wednesday before the official government version, showed that the private sector added 187,000 new jobs in January.  This is better than expectations and as we know better jobs numbers is good for the economy but bad for mortgage rates.  In the past, the ADP report has been an unreliable indicator of the official government report so I am taking this morning’s report with a grain of salt.

Rates are currently at the top end of the range they’ve been bound in for the past 5 weeks.  I am going to float into tomorrow in the hopes that they respond to technical trading patterns.

Current outlook: floating