Mortgage rates are unchanged this morning.
Friday’s jobs report came in below expectations (+96,000 new jobs) helping to keep mortgage rates near all-time low levels. The weaker than expected report increases the likelihood that the Fed will engage in a third round of quantitative easing (QE3) as soon as Thursday when they wrap up their monetary policy meeting. If they choose not to announce QE3 on Thursday most analysts agree that the Fed will pull the trigger before year end.
Also of importance this week is an anticipated ruling out of the Constitutional Court in Germany due out Wednesday. The court will decide whether or not it is constitutional for Germany, the European Union’s richest member, to participate in the region’s bailout fund. If the ruling allows Germany to participate it could put upward pressure on mortgage rates because it would be an encouraging sign for the ongoing debt crisis.
The economic calendar is fairly rich this week and the US Treasury is slated to auction $66 billion in fresh debt. I still think that the risks favor locking but feel less convicted than I did on Thursday of last week.
Current Outlook: locking bias