Mortgage Rates Again Sideways Today

Mortgage rates are moving sideways so far today.  Yesterday we saw a little improvement in regards to fees, but again, and as it looks so far since the open today, the range is not yet going to break.  Unfortunately, the pendulum is swinging towards the ceiling again, since we came close to the floor yesterday.

The Initial Weekly Jobless Claims were lower than expected, but more importantly, the closely watched four week moving average dropped as well.  This is near a historic low but this weekly release is from a holiday-shortened period which may have impacted some States' ability to complete a full report. So, this very low reading is being largely ignored by mortgage rates.

The most important news this morning was that the ECB left interest rates unchanged – and according to Draghi, there was no discussion about more stimulus.  The initial reaction in US Bonds was one of slight disappointment, but again, we are still within that 10BPS range that we have been hovering about for nearly two months.  At 10:00AM, we see the 10yr at 1.57% and the MBSs just in negative territory.

A big report is due later in regards to Consumer Credit.  We need to be cognitive of what the real number is as so many factors are put into this number – as we need to see the change in revolving debt (credit cards). This is used as a proxy for consumer spending although it is a less valuable data point than it once was as many online purchases are with debt and not credit cards.

As long as we stay in this narrow range, there is really no reason to not lock in on these low rates, but I do know some of my customers are risk takers and they love to play the game.  Just make sure you can tolerate the loss if it comes about.