Rate Update October 29, 2009
Mortgage rates are slightly improved from yesterday morning.
Probably the biggest economic story of the day is that the Commerce Department reported that GDP increased by 3.5% in the 3rd quarter; technically ending the “Great Recession” (don’t you feel better now?:) ). Analysts had expected an increase of 3.2% so the headline number is better than expected.
Inflation measures embedded in the report showed that consumer prices increased by 2.8% on a year-over-year basis and when you strip out volatile food and energy from the measurement increased by 1.6%.
The US Treasury will auction off $31 billion in 7-year notes today. Yesterday’s 5-year auction was not as strong as Tuesday’s auction of 2-year notes and we would assume the same is the case today. A weaker auction would likely pressure mortgage rates higher.
Mortgage Rates have now recovered by about .25% from the 10-day highs. From a technical standpoint it looks like mortgage-backed bonds may have run out of steam. Coupled with the economic data for the day we are going to recommend locking here.
Current outlook: locking