Mortgage rates are unchanged again today.
This morning the Labor Department that prices at the consumer level of the economy increased modestly in August. However, when you strip out volatile food and energy prices they remained unchanged. Inflation is the primary driver of mortgage rates and one reason why mortgage rates recently dipped was because of the threat of deflation. This morning’s report lies somewhere in the middle and thus mortgage rates are unchanged.
The economic outlook is mixed with one camp believing we’re headed for a double dip recession and another believing we’re on a path to sustained recovery. Mortgage rates dip when more investors fall into the “bearish” outlook and rise when optimism increases.
The technical outlook is also mixed with mortgage-backed bonds technically oversold but below technical resistance. I am going to stick with a locking bias.
Current outlook: locking bias