Mortgage Rates Steady

Mortgage rates held steady again today as it was another quiet session in the bond and mortgage markets but still some minor improvement as has been the case recently.  The yield on the 10yr is now at 2.16%.

Treasury sold $26B of 2yr notes this morning that got decent demand.  This afternoon at Noon, Treasury sold $34B of 5yr notes.  A more important auction in terms of MBSs and ARM loans - the auction was met with slim demand. The stronger demand pushed the 10yr a little lower but overall not a huge positive response.

The movers today - gold and crude oil.  Gold increased almost $20.00/oz. and is now at its highest price of the year - hedging against the continual expectation that stock markets are overbought and the continual decline in the US dollar. Gold has out-performed most stocks this year. Crude oil declined at one point $1.50 but is ending today down $1.16 at $46.71/barrel. Oil is lower due to the Texas flooding that is shutting down gasoline refineries.

Tomorrow the June Case/Shiller home price index is expected at the same numbers we got in May. The August consumer confidence index from The Conference Board is expected a tad lower than July’s number - consumer confidence has been increasing over most of this year but consumer spending data does not match the enthusiasm in the index.  It is high primarily because the stock market keeps climbing and regardless of those surveyed in the stock markets. Income has not increased as the Fed has been espousing with unemployment at 4.3% that historically would have wages and inflation climbing.

This week we doubt much improvement with August employment out on Friday. Unless you are locking at this low point of the narrow trade spectrum, cautiously float, but keep close to the readings that note changes are coming.

In summary, the lack of movement continues to be just fine for the average borrower, considering rates are at their lowest levels since November 2016.  This will change at some point, but it's been the case for nearly 2 months now, and especially true of the past 2 weeks.