Mortgage Rate Update January 13, 2011

Posted on by Evan in Rate Update

Mortgage rates are slightly better this morning.

Mortgage rates recovered yesterday afternoon following the US Treasury’s 10-year note auction which saw stronger demand than was anticipated.

This morning brought 3 economic data points to the markets.  Weekly jobless claims jumped last week which isn’t entirely surprising.  Employers who held off laying off workers during the holidays pulled the trigger last week.  In a separate report issued by the Commerce Department the US trade gap was reported lower than expected.  Clearly the weakening dollar is making US exports look more attractive around the globe.

Lastly, according to the Labor Department prices at the wholesale level of our economy grew by 1.1% in December from November.  When you strip out volatile food and energy prices the Producer Price Index only increased by .2%.  There were some alarming figures embedded in this report.  Prices for fresh vegetables surged 22.8% for the month & gasoline increased by 3.7%.  We may see these increases eek into the overall inflation figures in the coming months.

The US Treasury is set to deliver $13 billion in 30-year bonds today so we’ll have to keep a watchful eye out on that auction.  Mortgage rates continue to trade in a sideways pattern so I will maintain a neutral position.

Current outlook: neutral