Mortgage Rates Modestly Lower but Remain Near Recent Highs

Mortgage Rates edged just barely lower today, but remain close to the recent highs seen on Wednesday.  Along with November 12th, these 3 days contain the highest rates since the September 18th FOMC Announcement where the Fed held off on reducing asset purchases.  On a positive note, despite the two month highs, they're not far off from most of the recent activity.  Today's most prevalent rate quotes are going out between 4.375% and 4.5% for top tier scenarios, whereas most of the recent activity was 4.25%-4.375%.   Many lenders are closed today or are otherwise not issuing new rate sheets.

With today's slight improvement, the week ends up looking rather flat in terms of overall movement from last Friday.  This is about what you'd expect given the absence of significant events this week and extremely important events in the week ahead.  Next Tuesday is the only day next week that does NOT contain an important economic report in the morning.  Friday hosts the Employment Situation (aka "jobs report, official employment data, NFP") which is the most important economic report for the rest of the year.

Investors increasingly believe the Fed may move to reduce asset purchases in December if the upcoming jobs report is strong enough, though a great deal of debate remains.  If that happens, it would likely result in an immediate move higher for rates--perhaps significantly.  Investors will draw conclusions about the Fed decision almost immediately on Friday and may begin leaning in one direction several days in advance.  The point is that we're going from what has been a very flat few weeks to a potentially much more volatile December.

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