Mortgage Rate Update February 3rd, 2012

Mortgage rates are higher this morning.

When mortgage rates touched all-time lows on Tuesday I shifted my outlook to locking.  In hindsight I shifted 3 days too early but when it comes to locking rates it usually better to lock in too early than too late.

Interest rates are responding to a much better than expected monthly jobs report released by the Labor Department earlier today.  The report showed that the private sector added 257,000 new jobs in January (offsetting 12,000 in government job cuts).  They also revised higher previously released figures for November & December.  Overall the report is good news for the economy which is bad news for mortgage rates.

Also fueling optimism about the economic recovery was this morning’s Institute for Supply Management service sector index.  The monthly report showed better than expected activity for the month of January.

Meanwhile, there is still no debt deal between Greece and its creditors.  The markets continue to expect that a deal will get worked out and financial contagion will be averted but if not, I would expect US interest rates to decline slightly as investors rush for “safety”.

Current Outlook: locking