Rate Update July 1, 2010

Mortgage rates are basically unchanged this morning.

If you were looking for some positive economic news from ‘rate update’ today then please stop reading at this point.

Weekly jobless claims were reported to rise for the second week in a row today.  The 4-week moving average rose for the first time in weeks which is not a good indication of the economy’s trajectory.

The National Association of Realtors reported that pending home sales fell by 30% in May.  The markets were expecting a decline following the expiration of the tax credit but of a much smaller magnitude.  The silver lining in this report is that Portland (ME :)) bucked the national trend by having pending home sales increase in May.

Lastly, construction spending and manufacturing activity were reported worse than expected.

We are now less than 24 hours from the release of the all-important jobs report.  You can read about how this report tends to impact mortgage rates HERE.  Last months report was much worse than expected and mortgage rates have decreased substantially since June 4th.  One analyst I read is reporting that the markets are expecting 105,000 jobs created by the private sector but I don’t see how that could be. I believe a weak report is already baked into interest rates so even if the report is bad I wouldn’t expect mortgage rates to get all that much better.

I am recommending a locking position in the near term.

Current outlook: locking