Mortgage Rate Update March 28, 2011

Mortgage rates are higher this morning.

Before we get into the economic portion of ‘rate update’ I’d like to draw your attention to THIS CALL TO ACTION from the National Association of Realtors.  It is expected that some circles in Congress will look to curtail the mortgage interest deduction (MID) this summer as a way to shore up public deficits.  Whether or not you agree or disagree with this policy long-term I think we can all agree that curtailing the MID during one the worst housing downturns on record is not good policy.  Please respond to this Call to Action today!

In a positive sign for the economic recovery the Commerce Department reported this morning that consumer spending grew for the 8th straight month and at a faster clip than was expected.

The same report showed that the Fed’s preferred gauge of inflation was up only .9% on a year-over year basis when you back out food & energy prices.  With food & energy prices grew at a 1.6% pace; well within the Fed’s stated objectives.  Inflation is a primary driver of mortgage rates so tame inflation readings is a good sign.

The economic calendar for the week is fairly packed with $99 billion in US Treasury supply AND the all-important jobs report due out Friday.

Mortgage-backed bond (MBS) prices continue to hang onto technical support but only by a thread.  We remain in a floating stance until MBS prices break this support level.

Current outlook: floating