Mortgage Rate Update February 7, 2011

Mortgage rates are priced worse for a 5th straight day.  It’s been almost a year since the 30 year fixed best-execution rate was reported at 5.00% but that is where we lie this morning.

After a couple very busy weeks in terms of economic data this week’s schedule looks very light.  Thursday’s jobless claims figure is about the only schedule release with any meat on it.  Mortgage rates will have to contend with $72 billion in new debt supply from the US Treasury (click HERE to understand how government borrowing can impact mortgage rates).

So why have rates moved higher in recent weeks? If you read my December 2010 newsletter (see HERE) then this shouldn’t be a huge surprise.  The bottom line is that the economy appears to have stabilized and is gradually improving.  With that comes price pressures which have been non-existent for the past couple years.  Many investors don’t think the Fed will act quick enough to curb longer-term inflation, therefore yields are moving higher.

Current outlook: locking