Our shift to a locking bias yesterday from a neutral stance proved timely as mortgage rates are higher this morning.
Also pressuring rates higher is better than expected new home sales figures. The Commerce Department reported today that new homes sales jumped by 26.9% in March! Unfortunately the West only saw an increase of 5% but hopefully the trend will trickle across the country in the coming months.
Overall the economic outlook is continuing to improve. In fact, thus far in the 1st quarter earnings reporting season 85% of companies in the S & P 500 that have reported have met or beaten expectations. Good news for stocks is often bad news for mortgage rates.
Next week mortgage-backed bonds will have to contend with US Treasury auctions. The added supply may pressure rates higher.
Current outlook: locking