Mortgage rates opened up level with yesterday but appear poised to move higher this afternoon in response to a small rally in the stock market. Signs of economic stabilization have helped stocks move into positive territory.
The Commerce Department reported this morning that housing starts in the month of June increased by 3.6% which is much higher than expectations. With historically low interest rates & lower house prices some analysts believe that this morning’s report signals a “bottom” in the housing market. Ironically, this news is helping to pressure mortgage rates higher in the near-term.
In another sign of stabilization Google announced today that they were beginning to see demand for advertising firm. Their encouraging message is also supporting stocks which is hurting mortgage rates.
Not all the news is positive this morning. Financial bellwethers Citigroup & Bank of America posted mediocre 2nd-quarter earnings. Furthermore, CIT, which we covered in yesterday’s ‘rate update’ is still scrambling to avoid bankruptcy.
It does look like rates will be higher this afternoon so we recommend locking in at current levels.
Current Outlook: locking