Mortgage Rates Got Hit Hard Today
Mortgage rates got hit hard today – and boy was I wrong this morning when I stated that there should not be much movement today ahead of tomorrow’s release of the FOMC minutes. Early on it was quiet but by mid-morning, it became apparent we were in for a lot of selling today - actually the magnitude of the selling surprised a number of people. A good reminder that trading against the trend can be costly if you are not on top of it.
It is happening quickly now. The bond market turned bearish on Feb 11, and all the models went south on the same day. Today the 10yr almost broke above its 100 day average at 2.17% - not yet in any oversold area so traders are not too concerned that the increase in rates has maxed yet.
Not so good news from the consumer so far this year. The Fed reported debt data today. Household debt—including mortgages, credit cards, auto loans and student loans—rose $117B between October and December to $11.8 trillion. Q4 was good, so far I Q1 borrowing has slowed.
Its back! Last year almost every economic report this time of year was tainted with weatheritis. It is happening again with the bad weather in the NE and Mid-West. The snow, the cold and the continuation of bad weather forecast ahead will distort the data on consumer spending, weekly claims and most all of the reports we use to assess the economic condition. Any weak data will be excused due to weather.
In summary, as the Greek Drama continues to unfold, and Fed Members start chatting the newswires about potential shifts in interest rate policy mortgage pricing was vulnerable to a sell off today. We have broken out of a short term downward range in rates that on its face seems worrisome. If we get continued follow through tomorrow and the rest of the week it would cause me more worry for the intermediate term. Suffice it to say that locking up short term closing times now is important. For the longer term, if you can bear the risk of continued worsening in the short term than consider floating as we may very well bounce soon. No guarantees though.
It is happening quickly now. The bond market turned bearish on Feb 11, and all the models went south on the same day. Today the 10yr almost broke above its 100 day average at 2.17% - not yet in any oversold area so traders are not too concerned that the increase in rates has maxed yet.
Not so good news from the consumer so far this year. The Fed reported debt data today. Household debt—including mortgages, credit cards, auto loans and student loans—rose $117B between October and December to $11.8 trillion. Q4 was good, so far I Q1 borrowing has slowed.
Its back! Last year almost every economic report this time of year was tainted with weatheritis. It is happening again with the bad weather in the NE and Mid-West. The snow, the cold and the continuation of bad weather forecast ahead will distort the data on consumer spending, weekly claims and most all of the reports we use to assess the economic condition. Any weak data will be excused due to weather.
In summary, as the Greek Drama continues to unfold, and Fed Members start chatting the newswires about potential shifts in interest rate policy mortgage pricing was vulnerable to a sell off today. We have broken out of a short term downward range in rates that on its face seems worrisome. If we get continued follow through tomorrow and the rest of the week it would cause me more worry for the intermediate term. Suffice it to say that locking up short term closing times now is important. For the longer term, if you can bear the risk of continued worsening in the short term than consider floating as we may very well bounce soon. No guarantees though.
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