Mortgage Rate Update March 4, 2013

Mortgage rates are unchanged from last week.

There is a lot going on this week but I expect interest rates to remain flat until jobs numbers are released Wednesday-Friday.  Here are the storylines we’ll be following:

–Sequester:  The Federal government spending sequester took effect Friday but it will take weeks if not months for the actual economic impact to trickle down.  GOP & Demo leaders remain far apart from a budget deal.  On March 27th the Federal government is scheduled to run out of money.  Should any genuine fear of this becoming a reality work its way into the market mortgage rates would benefit.

–Jobs & Monetary policy:  The all-important jobs report is due out Friday with jobless claims and the ADP report proceeding it.

At this point ~200,000 new private sector jobs are expected for the month of February.  Fed officials continue to publicly and privately debate how long to prolong quantitative easing, which directly keeps rates low.  A strong report would pressure rates higher and vice versa.

–China & Italy: The Chinese government announced measures today to curb the property market there.  In response to the announcement the Chinese stock market dipped by 3.7%.  In Italy a leaders from the various political parties remain divided in forming a new coalition government.  The economic uncertainty in China and political uncertainty in Italy are helping US rates remain low.

Mortgage rates remain at the best levels in the past few weeks.  I expect rates will remain relatively steady until Wednesday when jobs data will drive the rest of the week.

Current Outlook: locking bias