October 24, 2012
Mortgage rates were steady to slightly higher on Wednesday despite a big increase in the amount of economic data and events from the first two days of the week. Although the periodic policy statements released by the FOMC ("The Fed") can have a significant impact on mortgage rates, that was certainly not the case today as markets in general remained largely unchanged after the announcement. The economic reports from the morning hours as well as an auction of 5yr Treasury Notes were similarly underwhelming.
For the most part, the movement in rates from a day-over-day perspective occurred mostly in the overnight hours during Asian and European trading. The secondary mortgage market moved inside a narrow range all day long after opening at slightly weaker levels. When prices of mortgage-backed-securities are weaker/lower, mortgage rates tend to rise. Even so, today's rise was limited to COSTS as opposed to RATES themselves. Best-Execution remained at 3.375% for 30yr Fixed, Conventional loans.
With today's FOMC Announcement out of the way and with it failing to motivate any sort of reaction in interest rates, markets are likely setting their sites on next week, which contains the big monthly Jobs report. That said, there are other data points and considerations between now and then that could have an impact. More than anticipating the impact of any of that data, we'd note that bond markets have been very sideways and lacking momentum in either direction. That sort of uninspired sideways movement often preludes a sharp, unexpected jump higher or lower.
Loan Originator Perspectives
"We remain "range bound" in interest rate land. The European crisis has (seemingly) quieted down. Lenders remain busy, thus reluctant to give more in interest rates (lower rates). Take that rate now is my advice. Waiting on an eighth is not worth the gamble. "Pigs get fat, Hogs get slaughtered." -Bob Van Gilder, Finance One Mortgage.