Mortgage rates are unchanged today.
This morning’s Institute for Supply Management’s (ISM) index showed better than expected economic activity in the service sector than was expected. The news has sent stocks higher which would ordinarily be bad news for mortgage rates.
However, weak economic news out of Europe and a surprise announcement from Japan that the Japanese Central Bank would engage in further quantitative easing has investors buying up fixed income securities, including mortgage-backed bonds, in anticipation of Fed action. As I blogged about yesterday (HERE) the market for interest rates has already baked in further quantitative easing on the part of the Fed. The question now is no longer “if?” but “how much?”.
Friday’s jobs report should be interesting. The market is currently anticipating 70,000 new jobs to be created by the private sector. Since mortgage rates are back down at historic low levels I am recommending a locking bias.
Current outlook: locking bias