Mortgage Rates Slightly Better

Mortgage rates were slightly lower today, recovering only some of the weakness seen over the past several days.  Apart from last Friday, today's rates are still the highest in a week.  There has been little if any changes overall in the rate market.  The absence of drama and volatility in the near term past is no guarantee of the same in the next few days.  The markets that underlie mortgage rate movement have been trading in a very narrow, tight and sideway range. 

This was not a good way to start the week that has a lot of key data, as we saw this morning both data points were weak. The February Chicago purchasing managers index was a lot lower than forecasted.  Recently this index has demonstrated unusual volatility.  It demonstrated along with other data that February did not start very well. Unlike the two ISM reports coming later this week, the Chicago data includes both services as well as manufacturing. New orders did hold over 50 but production was lower, employment is under 50 for the fifth month, and prices paid are falling quickly. Overall if the national ISM indexes drop more that estimates it will take a heavy toll on the equity markets. Tomorrow the national ISM manufacturing index is coming out.

The other not so good news was NAR’s January pending home sales.  The data was weak, but the revision did take away the sting. Year-on-year, pending sales are up only 1.4%. Today's report is yet another disappointment for a sector that, despite high employment and low mortgage rates, is getting off to a flat start for 2016.

Crude oil was higher today as the attitude is slowly changing in the oil world that the worst of the declines are over.  No reduced output and none appear likely - the sell at any cost mind set has been damaged. At current levels ($34.00) it is not as easy to sell as when oil is prices at $40.00.

The techs have been neutral for the past two weeks - not bullish or bearish.  Usually when markets move in that way the direction favors the longer term trend eventually - that trend if bullish. In the neutral phase it usually is volatile in a tight range. That said, I have still been cautiously floating.

In summary, rates trickled slightly lower today, despite some corporate bond issuance. World economic conditions are not going to cure themselves today, this week, or this month, so my hunch is rates continue to hover near recent ranges for a while. With that being said, if you are closing in the next 15 days, lock it up and not worry.  Pricing is great, if your risk tolerance is low and/or your funds to close are tight, I would lock while the locking is good!