Mortgage Rates Again SIdeways

Mortgage rates are again moving sideways today.  Late yesterday we saw some positive movement in the bond markets and the resulted in some slight but positive changes in our rates and fees this morning.

The one area of our economy that shows steady inflation (wages) continues its upward trend as Personal Income for August increased yet again. This time by 0.2% as this has increased each and every month this year. The market was expecting 0.2%. But despite monster Consumer Confidence readings and steady increases in wages, Personal Spending was flat at 0.0% which was just a tick below the consensus estimates. Inflation? Not enough yet as the Fed's closely watched Core YOY PCE reading moved up from 1.6% to 1.7% but still below their magical/mythical 2% level.

The bell weather Chicago PMI for September reading was much stronger than expected and a nice improvement over August.  The University of Michigan's Consumer Sentiment Index (final for September) was better than expected in yet another report that shows consumers have a good outlook on the future.

Fed Chair Janet Yellen said last night that the Federal Reserve might be able to help the U.S. economy in a future downturn if it could buy stocks and corporate bonds. This is in response to questions mounting that if the Fed is effectively at a zero rate (net of inflation actually at a negative rate) what can they do in response to an economic downturn? Dallas Fed President Robert Kaplan (non-voting member) will speak at Noon.

While slow and steady, mortgage rates are headed in the wrong direction on fairly low volatility.  The average to low volatility can change very quickly at these very low mortgage rate levels.