Mortgage Rates Moved Slightly Lower Today

Mortgage rates were slightly lower today, holding inside a low and narrow range that's been intact for nearly a month.  The most prevalently-quoted conforming 30yr fixed rate for flawless scenarios is still at 4.25%, with 4.125% and 4.375% in the mix depending on fees. 

About what we have expected, the bond and stock markets have seen little changes since last Friday. MBS prices were about unchanged yesterday but did improve a little this morning.  Some volatility occurred this morning when the July consumer confidence index increased to the best level since Oct 2007. Prior to the report the 10yr note yield had dipped to 2.45% .  It has now been two weeks with essentially no movement in the bond and mortgage market rates.

Tomorrow and the rest of the week markets have a number of critical reports.  Perhaps the biggest wild-card is the first reading on GDP for the 2nd quarter.  ADP will report its private jobs growth for July and Treasury will auction $29B of 7yr notes.  The wider the range of expectations for any important economic event - the bigger the potential reaction.  The heavy lifting comes at 1:00 when the FOMC will release its policy statement after the two day meeting. The most certain thing that will come on the policy statement is another $10B cut of monthly purchases of treasuries and MBSs. The FOMC is divided and likely there will have been a lot of back and forth discussions about when the Fed should begin increasing interest rates.   Jobs and the quality of the jobs though, is where the rubber meets the road in terms of the economic outlook.

In summary,  it seems pretty evident that until we get past the big data in front of us we're going to bounce around in a tight range until something pushes us one way or the other. This could happen starting tomorrow with the Fed decision and2nd Quarter GDP (first "guesstimate") and ending with the Jobs Report on Friday. If your closing is within 15 days and you are happy with the rate you can get today then LOCK. Too much risk. Beyond 15 days it could be a roll of the dice so check your risk tolerance for guidance.