Mortgage rates have stabilized following last week’s rout in the bond market.
A fed rate hike next month looks to be certain following this morning’s remarks by Fed Chairwoman Janet Yellen. She told lawmakers on Capitol Hill that a rate hike would come “relatively soon” which in her own cryptic way is being interpreted to mean ‘next month’.
Meanwhile, the Labor Department reported only 235,000 Americans filing for initial jobless claims last week. This is the lowest mark in 43 years! This weeks report is used as the sample week for the next monthly jobs report which will be released on December 2nd so lets not act surprised if that report shows strong growth.
The Labor Department also released its latest reading on the Consumer Price Index (CPI). It showed that core prices rose by 2.1% as compared to a year earlier. Consumer prices have now risen in seven of the past eight months and the pace of increases is increasing which gives credence for the Fed to hike short-term interest rates.
In housing news the Commerce Department reported that the number of housing starts increased by 25.5% in October as compared to a month earlier. This is the strongest pace since August of 2007 and is a welcome sign from the standpoint that additional supply should help dampen annual price appreciation to a more moderate level.
Everything I am reading is suggesting higher mortgage rates on the horizon so I will maintain a locking bias.
Current Outlook: locking bias