Mortgage Rate Update January 17, 2013

Mortgage rates are unchanged this week.

In the most recent 24 hours the markets have received a flurry of economic data.  Yesterday, the Consumer Price Index was reported and it showed inflation at the retail level of the economy remains tame.  Today, initial jobless claims are sharply lower (positive news) and housing starts were reported sharply higher (positive news).  Normally good economic news is bad for mortgage rates but rates have basically moved sideways all week.

The debt ceiling debate has gone nowhere this week.  Republicans continue to demand spending cuts while democrats want to raise revenue.  We’re in for a last minute showdown once again.  As I stated in previous updates, if the markets grow worried that the US will not raise the debt ceiling in time to prevent a default we may see rates temporarily dip.

In Europe both Ireland and Spain completed successful debt auctions today signaling that investors are feeling more and more confident in their ability to make it through the debt crisis.

Aside from that instance though I still believe mortgage rates are more likely to rise than fall from these levels.

Current Outlook: locking bias