Mortgage Rate Update March 17, 2011

Mortgage rates are mostly unchanged this morning.

The flight-to-quality trade which has helped rates move lower this week is unwinding a little bit this morning as a lack of developments in Japan has some investors optimistic about the outcome there.

In economic news, after a report showed that prices at the wholesale level of our economy grew by more than expected yesterday we saw consumer price inflation today.  The Labor Department’s Consumer Price Index showed that prices at the retail level of our economy also grew by more than expected last month.  However, most of the increase was in response to higher food and energy prices are deemed to be “temporary” (although I am skeptical of this view).

Initial jobless claims fell by more than expected last week which marks the second week in a row that fewer people have filed for unemployment benefits.  Good news for the economy is often bad news for mortgage rates.

With the circumstances in Japan still up in the air I will remain in a neutral position.

Current outlook: neutral