Mortgage rates are slightly improved from yesterday morning.
Probably the biggest economic story of the day is that the Commerce Department reported that GDP increased by 3.5% in the 3rd quarter; technically ending the “Great Recession” (don’t you feel better now?:) ). Analysts had expected an increase of 3.2% so the headline number is better than expected.
Inflation measures embedded in the report showed that consumer prices increased by 2.8% on a year-over-year basis and when you strip out volatile food and energy from the measurement increased by 1.6%.
The US Treasury will auction off $31 billion in 7-year notes today. Yesterday’s 5-year auction was not as strong as Tuesday’s auction of 2-year notes and we would assume the same is the case today. A weaker auction would likely pressure mortgage rates higher.
Mortgage Rates have now recovered by about .25% from the 10-day highs. From a technical standpoint it looks like mortgage-backed bonds may have run out of steam. Coupled with the economic data for the day we are going to recommend locking here.
Current outlook: locking