Mortgage Rates Took a Breather Today

Mortgage rates seemed to not know which way it wanted to go after the rollercoaster twist and turns we had for the past several weeks. Day-over-day rates have been the same or higher for 8 out of the last 10 days. Today was not one of them as it seems like they took a breather. The most prevalently quoted conforming 30yr fixed rate for best-case scenarios is fluctuating between 4.25% and 4.375%.  

Yesterday we talked about the economic outlook not looking good, regardless of what the Wall Street outlook appears to be. This morning the World Bank, another global financial entity, came out with its lowered estimate for US growth, in line with the Fed’s continuing lower revised forecasts in the last 12 months, and the IMF also revising lower their estimates every quarter.

The stock market took a hit today, it isn’t the beginning of what we expect to occur---not so soon. The World Bank outlook finally turned the stock indexes lower but they have edged higher for over two week now. The decline today is just a normal reaction after a market becomes too long in the tooth. All we heard from the hard core bulls today is that it is a buying opportunity; probably correct for the moment. 

Today’s 10yr note auction was not good, even after the recent increase in rates the demand was softer than most thought it would be.  

Some meat on the bone to chew on tomorrow - weekly jobless claims expected -3K to 309K. May retail sales are expected +0.6% overall and ex auto sales +0.4%. May import price (+0.2% and exports (+0.2%). April business inventories are expected +0.4% after increasing 0.4% in March. Treasury will conclude this week’s auctions with $13B of 30yr bonds, re-opening the May issue.  

In summary, a bit of a choppy day today, but in the end rates were essentially unchanged. The market seems quite comfortable where it's at, which means those hoping for imminent lower rates may be disappointed. Until poor economic data or sudden geopolitical strife arises, locking sooner, rather than later, is likely the expedient course of action.