Mortgage rates are effectively unchanged from the beginning of the week.
As expected the Fed left short-term interest rates unchanged yesterday following their 2-day monetary policy meeting. The Fed DOES NOT directly control mortgage rates but their decisions and comments can certainly influence them. The Fed did not clarify when the next rate hike may come but did state they remain on track to lift short-term interest rates in 2017. Fed Chairwoman Janet Yellen is scheduled to testify in front of Congress February 14th-15th so we’ll see if she drops any clues then.
Tomorrow we’ll get the all important monthly jobs report. The markets are currently expecting ~175,000 new jobs created. A number north of that would likely pressure mortgage rates higher and vice versa. In addition to the number of new jobs created analysts will be looking at average hourly wage growth. Are wages growing at an accelerating pace? If so, it would also be a bad sign for mortgage rates.
From a technical perspective mortgage-backed bond (MBS) prices are trading within a very tight range. The risk is that when MBS prices “break-out” of the range they have a greater likelihood of moving abruptly for better or worse.
The jobs report is very hard to handicap. Given that it is human nature to value loss more than a potential gain I am going to recommend locking in today.
Current Outlook: locking