Mortgage Rate Update January 31, 2011

Mortgage rates are priced better this morning following Friday’s slide in the stock market.

Protests continued in Egypt over the weekend and it looks increasingly likely that President Mubarak will be forced out of power.  Thus far the political tension in Egypt has caused little disruption to the global economy which is why rates have yet to experience a “flight-to-quality”.  The markets are keeping a close eye because 3% of the world’s oil flows through Suez Canal.

Here in the US the Commerce Department released data on personal incomes & spending.  The report showed that personal spending and income grew in line with expectations last month.  More importantly for mortgage rates, inflationary pressure amongst the items that consumers spent money on was <1.0% on a year-over-year basis.

The economic calendar is packed this week and wraps up with the all-important jobs report on Friday.  We have been in a floating position for the past couple days and we will remain there at least until tomorrow.

Current outlook: floating

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