Mortgage Rates Steady Now for Two Weeks

Mortgage rates held steady today, continuing a much-needed break from the move higher that dominated the first two weeks of October.  There was not any significant news today as the 10yr note still holding its technical resistance at 1.74% and mortgage prices doing slightly better than early morning prices. US stock indexes opened weak this morning but with little news the key indexes climbed back to about unchanged. MBS prices were fractional better but mostly noise and nothing important.

The lead today and the last week - the dollar, as it continues to strengthen against other currencies driven primarily on continued expectations the Fed will increase interest rates at the December meeting. Yesterday Mario Draghi at the ECB meeting did not make any comments about more stimulus, also supporting the possibility the ECB may be ending its additional buying and cutting rates when the current program ends next March. It is a long time in market time before Dec comes or next March. Japan keeping rates negative but has yet to increase spending and growth or inflation increases. In Japan, the negative rates have frightened consumers, savings are on the increase.

Next week there is no data on Monday, but we do have four Fed officials speaking.  I do not expect anything they would say will be news or have any impact on markets. By now most investors and money managers are numb to Fedspeak. Tuesday, Case/Shiller 20 city home price index, the FHFA house price index (both August data), October consumer confidence index from the Conference Board, and another Fed official. Wednesday Sept new home sales, 2 and 5yr note auctions. Thursday, September durable goods orders, NAR Sept pending home sales, 7yr note auction. And Friday, the first report (advance) on Q3 GDP, and the end of month U. of Michigan consumer sentiment index.

The best I can say for the bond market now is that the bellwether 10yr for two weeks has been in a very tight range - hence no volatility. Mortgage rates equally flat for weeks now. Whether consumers locked or floated it has not mattered either way. I doubt the tight range will continue much longer - next week housing data and consumer measurements may tip the scale but the election getting closer should keep US markets quiet overall.

In summary, pretty boring few days in the bond markets.   The benchmark 10yr note has made several attempts to break through resistance at 1.73 but so far it has held.  With yields not moving lower, there is not much benefit in floating.  If you are happy with the current terms and are within 15 days, I would advise that you consider locking.