Mortgage Rates Again Not Moving Much

Mortgage rates have not moved much in the last several weeks, which leaves us little to talk about if we are examining rate changes daily. It seems like each day I inform you that we saw an increase here, and a slip there, but in overall, we have been in a very tight range with rates not moving but the fees associated with those rates changing. 

Today we saw some minor slippage today on MBS prices, and the 10yr increase its yield to 2.20%.  Stock indexes also were also quiet and slightly lower. On the day, ahead of key speeches tomorrow by Janet Yellen and Mario Draghi keeping investors and traders at bay today. Pundits thinking Yellen’s speech may be a major speech that sets up the rest of the year for the Fed - and it may be her last with her term expiring in February unless Trump asks her to stay on - and that is a possibility.

July existing home sales down 1.3% against forecasts of an increase of 0.9%. July headlines for the housing sector not good, new home sales were thought to be unchanged from June but fell 9.4%, although there were upward revisions for June and May. Prices too high now to include first time buyers being priced out of the markets - wage increases lagging and not escalating in line with housing costs.  Continual low inventories driving prices higher in many markets. Builders complain about high land costs, excessive regulations, and lack of skilled labor for not moving more heavily into low price homes. Regardless of the reasons the housing industry in this now 9-year recovery from the great recession in 2008 has not lead the economy out of the doldrums that has been the case in every recession recovery since WW II. 

I talked briefly this morning that gasoline prices will increase. The now hurricane Harvey is moving directly into the Texas area that has one-third of the gasoline refineries. It is gaining speed. 30 inches of rain expected as it will stall over south Texas. This could end up being a major long-term problem if the refineries are seriously damaged.

Beside Yellen and Draghi tomorrow, July durable goods will come out in the morning. This report will be updated to more significant interests in about two weeks when July factory orders are released.

In summary, Treasury yields hovered just under 2.2% today, but failed to add to yesterday's rally.  We are basically mired at the bottom of our recent range, which is better than being mired at the top.  I do not foresee the Fed's J-Hole meeting revealing any earth shattering economic news.  Like your pricing?  Why not lock?  If floating, do not get greedy, rates go both down and up.