Mortgage Rate Update Octobr 31, 2013

Happy Halloween!  Although mortgage note rates are mostly unchanged from the beginning of the week the accompany closing costs are slightly higher so in fact pricing has worsened modestly.

The Fed emerged from their normal 2-day monetary policy meeting yesterday and provided no additional clarification as to when they may begin to taper quantitative easing (QE), which is designed to keep long-term interest rates low.

 Some analysts had been predicting that the Fed would explicitly commit to keeping QE in place at full force into 2014.  However, the lack of any mention of a time table leads some to believe that a tapering plan may be announced at the Fed’s last monetary policy meeting for 2013 which will take place on December 17th-18th.

Most of the economic data released this week has been modestly stronger than expected.  Good news for the economy tends to be bad news for mortgage rates.

Pricing on mortgage rates worsened slightly following the Fed announcement yesterday but mortgage-backed bonds (MBS’s) remain above the important 200-day moving average which was highlighted in Monday ‘rate update’.  As long as MBS prices remain above this level I will recommend floating.

Current Outlook: floating

A quick housekeeping note: Don’t forget that daylight savings time ends this Sunday, November 3rd at 2AM.  Set your clocks back one hour Saturday night.