Mortgage Rate Update July 31, 2013

If you’re wondering why you are ready ‘rate update’ this morning it is not because you accidentally slept through your alarm on Wednesday and woke up on Thursday.  Given everything going on in the marketplace this morning I decided to send ‘rate update’ one day early because I am going to strongly recommend locking today (in case you did not follow my advice on Monday).  Fixed mortgage rates are ~.125% higher this morning and I anticipate they’ll be another .125% higher by the end of the week.

Stronger economic data is pushing rates higher this morning.  The Commerce Department reported that 2nd quarter Gross Domestic Product grew at a 1.7% annualized rate.  This was almost 2 times expectations.  The Commerce Department also revised the previously reported 2012 growth rates from 2.2% up to 2.8%.

In a separate report the private payroll company reported that the US economy added 200,000 during the month of July.  This was also stronger than what analysts had been expecting.  Good news for the economy is often bad news for mortgage rates.

All this comes before the two most significant events of the week.  At 11AM PST today the Fed will releases its monetary policy statement and on Friday we get the all-important jobs report.  It is widely expected that Fed will not change anything significant at this meeting.  Instead, as I’ve predicted for weeks they will likely announce their plan to scale back quantitative easing at the next meeting scheduled September 18th.  We wouldn’t be surprised to see some hints dropped later this month at the annual convention of central bankers in Jackson hole, WY.

The bottom line is that neither the news nor the technical outlook for mortgage rates is positive right now.  I would strongly recommend locking in today.  The next ‘rate update’ will be on Monday.

Current Outlook: locking bias