Home Loan Rates
Mortgage rates are mostly unchanged from last week despite economic news which has not been rate friendly.
Last Friday’s all-important jobs report showed that 291,000 new jobs were created during the month of January. Analysts had been expecting a figure closer to 160,000 new jobs.
Normally when the jobs report comes in hotter than expected it causes rates to rise but they barely budged following the release.
Fear over the Coronavirus may be keeping a lid on mortgage rate increases. There are now over 40,000 confirmed cases.
News reports this morning suggest the spread of the virus may be slowing which is positive news for the economy but ultimately may unwind the “flight-to-safety” in the financial markets which has helped interest rates hit recent lows.
If the spread of the virus begins to decelerate then I expect mortgage rates to increase modestly.
Fed Chairman Jerome Powell testified in front of lawmakers earlier today that the Fed was monitoring the Coronavirus outbreak closely but that it was too soon to measure the economic impact it is having.
The financial markets currently think there is an 80% chance that the Fed will cut short-term interest rates at least once during 2020. Although the Fed does not directly control mortgage rates the comments they make can influence them.
The week ahead
The weekly economic calendar features plenty of scheduled Fed speeches. In addition, we’ll see the Consumer Price Index on Thursday as well as Retail Sales and Consumer Sentiment on Friday.
From a technical perspective I think borrowers have more to lose than to gain so will maintain a locking bias.
Current Outlook: locking