Mortgage rates are more or less unchanged this week.
Despite much stronger demand than was expected for the US Treasury’s 10-year note auction yesterday mortgage rates are having trouble breaking below current levels. Generally speaking when investors buy up US Treasuries it helps mortgage rates move lower.
This morning weekly jobless claims fell sharply lower.
Coupled with last Friday’s better than expected jobs report there are some analysts who now believe the labor market is on the mend. I hope they are right but I still think there are strong economic headwinds ahead.
Pressure is mounting on the Spanish Prime Minister to request a bailout from the European Union. Standard & Poors lowered Spain’s credit rating to one level above junk status earlier today. It is widely viewed that Spain is on an unsustainable fiscal path. What is unclear is if the bailout will solve their problems or kick the can down the road. Either way, mortgage rates do face the risk of an aggressive bailout program being announced as this would likely cause rates to rise.
Mortgage rates have had trouble breaking below current levels which means it may make sense to lock. I am going to shift a neutral position and if rates do not improve by Monday I will move to a locking bias.
Current Outlook: neutral