Mortgage Rate Update March 14, 2013

Posted on by Evan in Rate Update

Mortgage rates are mostly unchanged this morning after we saw modestly better pricing the past 2 days.

Weekly jobless claims, which are released every Thursday, were reported lower again this week.  Statistically it is very clear that the jobs market is finally improving which means we are continuing on a track that will ultimately lead to the Fed unwinding quantitative easing and higher interest rates.

JOBLESS CLAIMS HAVE STEADILY DECLINED WHILE MORTGAGE RATES HAVE DONE THE OPPOSITE.
JOBLESS CLAIMS HAVE STEADILY DECLINED WHILE MORTGAGE RATES HAVE DONE THE OPPOSITE.

However, inflation data out today suggests that the Fed does not need to rush into monetary tightening.  The Producer Price Index, which reports on prices at the wholesale level of our economy, showed prices rose by 1.7% year-over-year which is well within the Fed’s comfort level.  Tomorrow the Consumer Price Index is scheduled for release.

The US 10-year treasury note is currently trading at ~2.04%.  The recent high was created last Friday at 2.08%.  Should the 10-year treasury yield close above 2.08% today it would be a sign of higher rates moving forward.

We floated on Monday and saw modest gains Tuesday and Wednesday.  I now think the safe play is to lock.

Current Outlook: locking