Mortgage rates are mostly unchanged from last week.
When the markets opened this morning it looked like mortgage rates would be headed higher. However, a weaker than expected retail sales report is lending support to the bond market and rates are starting off the week unchanged.
The big event this week is Fed Chairman Ben Bernanke’s testimony to Congress which will take place in the next couple days. Since Chairman Bernanke dropped a bomb on the markets about one month ago that the Fed would move to unwind quantitative easing
Fed officials have been trying their best at damage control. If Bernanke’s tone is “accommodative” then we may see rates move lower but should the markets interpret his comments as “hawkish” it could push rates higher.
From a technical perspective we need to be cautious as the great Barry Habib called out this morning in his update (Barry Habib is a legendary mortgage rate analyst based in New Jersey). Mortgage-backed bond (MBS) prices are currently trading at the top end of a clearly defined range. If we assume all else is equal then we’d expect MBS prices to fall and rates to rise in this position.
Current Outlook: locking bias