Mortgage Rate Update February 9, 2017

Mortgage rates continued to improve modestly this week and are currently at multi-week lows.  That said pricing is modestly worse this morning so momentum may be shifting.

With heavy snow covering much of the northeastern seaboard we have to be prepared for some volatility in the financial markets.  Its likely that fewer traders are able to make it into their offices and therefore we can assume there are fewer buyers and sellers which can lead to wider swings.

As I stated on Monday the economic calendar has been light this week.  In the absence of significant data mortgage rates tend to react to technical trading patterns and the stock market.

The technical outlook is not favorable.  The yield on the US 10-year treasury, which mortgage rates tend to track, has traded between 2.30%-2.60% since the end of November.  It got down to 2.34% yesterday and has bounced to 2.38% this morning.  Unless the yield can dip below 2.30% it looks as if rates may reverse trend higher.

Stocks are also rallying this morning on news that the Trump administration intends on accelerating tax cuts.  When stocks rally it tends to hurt mortgage rates.

I will maintain a locking recommendation.

Current Outlook: locking