Mortgage rates remain unchanged as does the storyline regarding the fiscal cliff.
The attention being paid to fiscal cliff negotiations rivals that of the Super Bowl. However, at least with the Super Bowl there is plenty of action for spectators. There is still little to no significant progress on budget negotiations in Washington DC and I maintain there likely will not be until the 11th hour when I believe lawmakers will pass a short stopgap measure that punts true reform to 2013. In the meantime, mortgage rates should remain near current levels.
The economic calendar is full this week with reports due out on employment, construction spending, and productivity (a key factor of inflation). The all-important jobs report is due out Friday and expectations are for far less job growth than we saw last month. We’ll also be watching the release of the ADP version of the report due out Wednesday because last month the results were similar.
I don’t believe a borrower needs to rush into locking given that a solution to the budget deficit is likely a couple weeks away. That said, a person needs to ask himself, “how much better will rates get?”.
Current Outlook: neutral