Rate Update February 1, 2010
Mortgage rates are unchanged from Friday.
The equity markets are trading higher across the board this morning which is putting pressure on mortgage rates. Stocks are reacting to a better than expected manufacturing report which showed that 13 out of 18 industries reported growth in manufacturing activity for January. Good news for the economy is often bad news for mortgage rates.
The manufacturing report is overshadowing other economic data. The Commerce Department released data that showed that construction spending tumbled in December. The Commerce Department also released the monthly Personal Income report earlier which effectively met analysts’ expectations. Embedded within the personal income report is the Fed’s favorite gauge of inflation known as the Personal Consumption Expenditure Price Index (PCE). The PCE was reported in line with expectations which is good for mortgage rates.
Looking forward to the rest of the week Wednesday, Thursday, and Friday will be busy. The week ends with a bang when we get the jobs report. Mortgage-backed bonds are trading lower this AM so we’ll remain in a locking position.
Current outlook: locking