Mortgage rates ended last week with a bit of a let down as the much anticipated Employment Report came and went. Although the data was worse than expected, something that is normally interest rate friendly, the bond market failed to make any positive progress and mortgage rates moved slightly higher. READ MORE

While the economic calendar is empty today, the rest of the week is a little more busy. Here are the events and data points that might move rates this week. Thursday and Friday hold the most influential reports and events.   As a general rule, worse than expected economic data benefits the fixed income markets, while better than expected data benefits equities. 

Tuesday

• International Trade
• Philadelphia Federal Reserve Bank President Charles Plosser speaks to the Entrepreneurs Forum of Greater Philadelphia.
• $40 billion 3 year Treasury notes up for auction.

Wednesday

• MBA Mortgage Applications Index
• $21 billion 10 year Treasury notes up for auction
• Beige Book

Thursday

• Retail Sales
• Jobless Claims
• Import and Export Prices
• $13billion 30 year Treasury bonds up for auction

Friday

• Consumer Price Index
• Empire State Manufacturing Index
• Industrial Production
• Consumer Sentiment

READ MORE ON THE DATA CALENDAR AHEAD

READ MORE ON THE BOND MARKET'S SENTIMENT

Reports from fellow mortgage professionals indicate lender rate sheets to be similar to Friday’s.  The par 30 year conventional mortgage rate remains in the 4.875% to 5.125% range for well qualified consumers.  To secure a par interest rate you must have a FICO credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including an estimated one point loan origination/discount/broker fee.  You may elect to pay less in upfront fees, but you will have to accept a higher interest rate.

On Friday I informed you that I would likely hold onto my lock bias until the rates market provided confirmation of a recovery rally...but would however see days where floating was acceptable overnight. For now we see the best opportunity to float overnight being later in the week after the Treasury auctions are completed. The hope is the recent bias towards selling in the rates market may be over done, as in the bond market is "oversold" and due a relief rally. 

Don't let this short term strategy confuse you though, further out we still expect mortgage rates to either hold near current levels or move higher. If you are floating and intend to continue to do so until after this week's Treasury auctions, I wouldn't let short term improvements sit for too long. Until we see the market confirm a positive outlook towards interest rates, we will be "selling into strength" aka looking to  lock in when lenders do improve mortgage rates.