Mortgage Rate Update June 13, 2013

Mortgage rates are mostly unchanged for the week.

Yesterday’s US 10-year treasury note auction was met with weaker demand than was expected despite the fact that the yield on the notes were .40% higher than the last auction (2.20% up from 1.80%).  Mortgage rates tend to track the movements of the 10-year treasury yield so this development is not favorable for mortgage rates.

This morning’s initial jobless claims numbers showed that fewer people than were expected filed for unemployment benefits last week.  The current level of claims is currently at 5-year lows.

In other economic news monthly retails sales were reported stronger than was expected for the month of May.  Economists had been expecting a rise of .3% and the increase came in at .6%.  Good news for the economy is often bad news for mortgage rates.

Japan’s stock market fell 6.4% earlier today and is now off 20% in the past 6 weeks despite running up over 50% in the 6 months prior.  The increased volatility may cause investors to seek safety which may help US interest rates stabilize.

We keep waiting for a signal that mortgage rates may stabilize and maybe even reverse lower.  However, the momentum in the market is strong and it’s difficult to bet against that.  I will remain in a locking bias.