Mortgage rates are slightly worse compared to the beginning of the week.
All focus is on tomorrow’s monthly jobs report. Expectations are currently set for ~170,000 new private sector jobs created. Given that the Fed has indicated that they are ready to taper quantitative easing (QE), which is monetary policy designed to keep long-term interest rates low, once they feel the economy is on a more firm footing a stronger than expected report would almost certainly push rates higher.
However, the increase may be tempered by the fact that US stocks would almost certainly decline on a stronger than expected report due to the fact that equity markets also benefit from QE. When stocks fall mortgage rates generally fall as well.
The analysts I like to follow believe the jobs report is poised to come in short of expectations. If that is the case I we may see rates improve modestly in the near term but it would not change our longer-term outlook of rates moving higher this year.
If you’ve following the outlook of ‘rate update’ you know that I have recommended a locking bias for the past couple weeks. I am going to shift into a floating bias headed into tomorrow’s job report. If you don’t have a stomach to gamble then lock in today.
Current Outlook: floating