Mortgage Rate Update May 2, 2013

Posted on by Evan in Rate Update

Mortgage rates have improved modestly from Monday.

The European Central Bank (ECB) cut a key short-term interest rate earlier today in an effort to stabilize the region’s economy.  Lower yields available to European investors will encourage money to cross the Atlantic and should help US interest rates remain low.

Our own Central Bank, The Federal Reserve, released their latest monetary policy statement yesterday.

IN THEIR LATEST MONETARY POLICY STATEMENT THE FED REVEALED THEY ARE ACTUALLY OPEN TO FURTHER QE.
IN THEIR LATEST MONETARY POLICY STATEMENT THE FED REVEALED THEY ARE ACTUALLY OPEN TO FURTHER QE.

 As you may recall from monday’s ‘rate update’ investors were eager to hear if Fed officials would offer any more clarity around their plans to unwind quantitative easing measures.  The Fed actually tweaked their statement to reveal that they are open to further easing if the economy slows.  As a result, mortgage rates have actually improved modestly.

I believe the improvement will be short lived and am keeping my outlook at locking.  Tomorrow the Bureau of Labor Statistics is set to release will release the all-important jobs report for April.  The last report was dismal and contributed to the trajectory of interest rates over the past month.

Current expectations are for tomorrow’s report to show ~155,000 new jobs created in the private sector.  I believe the report has a reasonably good chance of meeting or beating expectations which would likely pressure rates higher.

Current Outlook: locking