Mortgage Rate Update January 10, 2013

Mortgage rates are mostly unchanged this week.

With a lack of significant economic data and Congress out of session this week mortgage rates have held steady and responded to technical trading patterns.  From a technical perspective mortgage rates have run into resistance at the 100-day moving average as the chart shows below.  As long as this level remains intact it will be difficult for rates to move much lower.

Also discouraging rates from moving lower was yesterday’s 10-year US Treasury note auction.  Yesterday’s auction was met with softer demand than expected and today the Treasury is back on the auction block offering longer-duration 30-year bonds.  If today’s offering is also met with softer than expected demand mortgage rates would likely be pressured higher.

I expect rates to remain steady into next week when Congress is back in session and the debt ceiling debate comes back into focus.

I wouldn’t be surprised if rates improve by .125% or even .25% at any point in the next few weeks but over the long haul floating your rate carries risks.

Current Outlook: long-term locking bias