Mortgage Rates are slightly better than they were yesterday.
As you’ve probably already heard the Fed left short-term interest rates unchanged yesterday which was expected. They also left language in their post-announcement statement that they would leave rates low for an extended period of time. At the same time, they also identified economic factors they would be tracking to determine when they’d need to start raising rates to curb inflation (rates of resource utilization, inflation trends, and inflation expectations). This move is appreciated by the markets as it reduces uncertainty.
Mortgage-backed bonds (MBSs) hardly budged on the announcement and they continue to trade sideways between technical support and resistance.
Attention is now squarely focused on tomorrow’s monthly jobs report. This is typically the most closely watched recurring economic report in the marketplace. Analysts are expecting job losses of 175,000 last month and for the unemployment nationwide to hit 9.9%. Anecdotal evidence suggests that the job market remain sluggish so we wouldn’t be surprised to see this figure come in higher than expectations which would likely help mortgage rates.
Lastly, the Senate approved legislation yesterday which would extend and expand the first-time homebuyer tax credit. The bill is now on the way to the House of Representatives and is likely to pass. From there President Obama is expected sign it into law.
Current outlook: neutral near-term, locking long-term