Mortgage interest rates increased slightly on the week as economic data was mostly stronger than expected. Economic data stronger than expected included January Retail Sales, weekly jobless claims, January Capacity Utilization, the University of Michigan Consumer Sentiment Index, and the February New York Empire State Manufacturing Index. January Industrial Production was weaker than expected but December and November numbers were revised upward reflecting the largest gains in Industrial Production since February of 1984. The Treasury auctioned $72 billion in 3 Year Notes, 10 Year Notes, and 30 Year Bonds which were met with mixed demand from markets. Markets continue to monitor the sequestration talks between Congress and the President to see if the $85 billion in automatic spending cuts starting March 1 will be averted. In Europe, the euro area economy shrank 0.6% in Q4, its worst performance in almost four years.
The 10-year T-note continued to creep its way upward, at 2.03% this week the highest in 10 months. Hardly a rocket-ride, but disquieting. Perhaps the US and global economies are turning the long-expected corner, but that turn is still in forecasts, not current data. The gold market suddenly believes the greatest economic danger is past, crashing thirty bucks today. Yet, the NFIB survey of small business is stumbling along in recession. Two other explanations for market movements: just another false-recovery party; and/or queasiest of all, the Fed is losing its ability to hold down long-term rates. Mr. Obama's State of the Union, a time warp to the Great Society: "Our government shouldn't make promises it cannot keep -- but we must keep the promises we've already made." In at least half of the households listening, the last dozen years have failed economic expectations, and grown-ups have un-made promises even to children. That's what sensible people do.
Mortgage interest rates have increased slightly over the past month due to positive economic data. Currently, a Conventional 30 year fixed rate is hovering around 3.75% with no points.
** Mortgage rates are subject to daily market fluctuations and can change without notice. Mortgage rates are also effected by down payment, occupancy, loan amount, credit score and property type.
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