Mortgage Rates Still In Tight Range

Mortgage rates have swung with the pendulum again as yet another day that is the same as the last, that is same as the last, and the same as the last. Almost a month now with no change in interest rates. Nothing has moved the bond and mortgage markets and it appears nothing will. This morning the NY Fed Empire State manufacturing index was much lower than expected, but no reaction.  The NAHB housing market index in line with forecasts even with July revised lower, again no reaction. 

Tomorrow July CPI numbers are coming out.  Last Friday July PPI was actually down. July housing starts and permits will also come out, along with July industrial production and capacity utilization.

Not that it matters one bit, but Dennis Lockhart, Atlanta Fed is scheduled to talk tomorrow with Q&A.  Other reporting Fed speeches are just blah – blah – blah and I do not pay much attention to them anymore. That said, markets suck up every syllable as if gospel, the media salivates over them.

The stock market continues to increase as the global economic outlook is expected to slow. Not sure when that will end but when it does the run to safety will match the rush out the door. It may end when companies run out of funds to buy back stocks and increase dividends. Oil looked vulnerable a week ago, since then the price has increased, the equity market just loves that but I suspect it is lemmings following the leaders.

The 10yr in the middle of its range as it closed at 1.55%.  MBS prices lower on the day and lower than when prices were set this morning. The technical models remain neutral and until the trading rage breaks loose on the 10yr (1.50%/1.60%) there will be no change to that and holding rate locks does not benefit LOs and only slightly lenders if they can capture the swings correctly.

In summary, rates moved back up a bit after having made it to 1-month lows on Friday.  They are still nearer to lower end of "the range," so that's been a statistically smarter time to lock.  But again, the range is so narrow, that the consequences are far from dire no matter what you do.  If you choose to float, just be sure to set a line in the sand to act as your signal to lock if it's broken.