Mortgage rates are priced slightly better this morning compared to yesterday.
It’s a new day but same story as yesterday. Interest rates are improving very modestly on renewed concerns over foreign economic growth and the European Debt Crisis.
An index of leading economic indicators for the Chinese economy unexpectedly fell by more than expected earlier today triggering concern about the health of the global economy. A slowdown in China would likely have a multiplier effect that would drag other economies down with it. Yields on Spanish debt continue to rise as investors grow concerned about the ability of the Spanish government to meet its obligations in light of an economic slowdown.
Late last week mortgage rates increased by about .25% across the board after the Federal Reserve excluded any mention of further quantitative easing from the monetary policy statement. Whenever we see acute moves in the financial markets it’s not uncommon for the trend to retract in the immediate term. However, for mortgage rates to dip back down to all-time low levels we’d need to see the 10-year Treasury yield drop back below the important technical level of 2.10% which I do not see as a likely occurrence.
Therefore, I am going to recommend a locking position anytime we see this momentary improvements in pricing.
Current Outlook: locking bias