Mortgage Rate Update March 7, 2013

Mortgage rates improved slightly on Monday and Tuesday but with stocks rallying to all-time highs it has caused pricing on interest rates to worsen.

US stock investors have ignored the topics which helped interest rates improve early this week (fear over sequester, looming debt ceiling, and European Debt Crisis) as the Dow Jones Industrial Average created a new all-time nominal high on Wednesday..  The increase was fueled by a better-than-expected ADP payroll report which showed about 200,000 new jobs were created in February.

DJIA_march_6
But the more important gauge for the jobs market comes tomorrow when the Bureau of Labor Statistics releases their numbers.  Expectations for this report are for about 200,000 new private sector jobs.  A number north of that number would likely cause rates to worsen and vice versa.

The House of Representatives passed a stopgap spending bill yesterday that would extend government funding to September and avoid the looming government shutdown which is currently scheduled for March 27th.  The Senate is expected to pass the bill next week.

It’s always tough to predict the direction of mortgage rates headed into a jobs report but I maintain that during 2013 mortgage rates rates are widely expected to increase.  Therefore, better to play it safe than sorry.

Current Outlook: locking bias

The views and opinions expressed in this site are those of the author(s) and do not necessarily reflect the official policy or position of Cherry Creek Mortgage Co., Inc. This is for informational purposes only. This is not a commitment to lend.