Mortgage Rate Update November 14, 2013

Posted on by Evan in Rate Update

Mortgage rates improved modestly yesterday and have held thus far on Thursday.

As I wrote about on Tuesday, the main event for the financial markets this week is taking place as I type.  Federal Reserve Vice-Chairman Janet Yellen is currently in front of lawmakers for her confirmation hearing to replace Ben Bernanke as the Federal Reserve Chairman.

YELLEN'S Q&A SESSION COULD BE THE CATALYST FOR RATES TO CHANGE FOR BETTER OR WORSE TODAY.
YELLEN’S Q&A SESSION COULD BE THE CATALYST FOR RATES TO CHANGE FOR BETTER OR WORSE TODAY.

The main subject the financial markets are interested in hearing about is quantitative easing (QE).  Any hint that the Fed is planning to taper QE sooner rather than later would likely pressure mortgage rates higher and vice versa.  In her prepared comments Yellen sounded fairly friendly towards QE which bodes well for rates.  However, its during the question and answer period that things could get interesting which is why I have advocated a locking bias this week.

Yesterday’s US 10-year treasury note auction was met with modestly better demand than analysts had expected.  This is a good sign for mortgage rates because demand for these financial securities is also an indication that there will be demand for mortgage-backed bonds as well.  Today, the US Treasury is scheduled to auction $16 billion in 30-year bonds.

For now we’ll maintain a locking bias.  We may shift this outlook later in the day depending on how the markets interpret Yellen’s comments.

Current Outlook: locking bias