Mortgage Rate Update March 2, 2011

Pricing on mortgage rates improved this morning but the note rates remain unchanged from yesterday.

Yesterday afternoon stocks sold off sharply as oil prices pressed above $100/ barrel.  This helped mortgage-backed bonds rally which is why pricing on mortgage rates are improved this morning.

This morning payroll company ADP released its monthly version of the jobs report.  It showed much stronger than expected employment growth in February.  On the news stocks are trading modestly higher and mortgage rates are threatening to worsen.  It’s amazing to me that the markets pay any attention to this report.  It rarely correlates to the more important government report due out on Friday.

The economic calendar heats up tomorrow with initial jobless claims and then the all-important jobs report on Friday.  Unless any developments break in the Middle East I expect rates to remain steady until Friday’s report.  Let’s not forget that rates have improved by about .25% in the past couple weeks and we are in the middle of a time where analysts overwhelmingly believe that long-term rates should be moving higher.

Current outlook: locking