Mortgage rates are better today following Friday’s rally in the bond market.
Although rates are lower today than they were last Thursday the year is not starting out well for mortgage rates. So far this morning mortgage-backed bonds are trading lower in response to a rally in stocks.
Optimism continues to bubble on Wall Street as two more economic reports released this morning showed encouraging signs. According to the Commerce Department construction spending grew by more than expected in November. In fact, all the major sub-components of the report showed better than expected growth.
In a separate report the Institute for Supply Management’s index for manufacturing activity in the US was also reported better than expected. However, the employment component in the report showed slower growth.
No matter US stocks are rallying this morning as the Dow Jones Industrial Average hits a 2-year high. Over the past 3 months the relationship between stocks and interest rates is very clear. Stocks have rallied pushing rates higher:
Current outlook: locking