Mortgage Rate Update May 4, 2011

Mortgage rates are unchanged this morning.

Low rates continue to persist despite technical trading signals that suggest they are vulnerable to move higher.  Rates are benefiting from weakness in the stock market.  In early morning trading the Dow Jones Industrial Average is off 100+points.

Where are the jobs?

Investors are reacting to two soft data points released this morning.  In the first of three looks at conditions in the labor market this week private payroll company ADP released its version of the monthly jobs report.  It showed that private companies added 179,000 new jobs in April which was slightly less than expectations.  Friday’s Bureau of Labor Statistics monthly jobs report carries more weight and often times there is no correlation between these two.

The Institute for Supply Management released its monthly read on economic activity in the service sector, which represents a large portion of our economy, and it showed lower than expected output last month.

We still have two important data points left this week in the jobless claims figures due out tomorrow and Friday’s monthly jobs report.  Thus far rates have held steady at these low levels but the technical picture has not changed.

Current Outlook: locking