Mortgage Rate Update October 28, 2013

Mortgage rates are unchanged to start the week.

We’ll start off the week with a quick technical note on mortgage rates.  As an update to the October 21st ‘rate update’, mortgage-backed bonds (MBS’s) have managed to break above the important 200-day moving average.  As long as MBS prices remain above this level it bodes well for mortgage rates.  The converse is that if MBS prices get dragged back below the 200-day moving average it would cause rates to reverse higher.

The economic calendar is full this week.  Earlier today the Federal Reserve released data on US industrial production & capacity utilization.  Both numbers were better than expected.  However, this good news is being offset by weaker than expected pending home sales as reported by the National Association of Realtors.

Looking ahead, key economic data will be released almost each and every day this week.  Tomorrow we’ll get retail sales and the Producer Price Index, on Wednesday we get the Fed’s latest monetary policy statement and Consumer Price Index, and on Thursday we get Personal income and the Personal Consumption Expenditure price index.  Lastly, the US Treasury will be issuing $96 billion in fresh US debt securities.

For now we’ll continue to float so long as MBS prices remain above the 200-day moving average.

Current Outlook: floating