Mortgage Rate Update June 15, 2011

Although mortgage note rates are unchanged pricing of mortgage rates is slightly worse this morning.

One month ago the New York Fed released it’s monthly survey of manufacturing activity in the New York region which showed sluggish economic activity.  Today, those monthly results were reported again and showed contraction which fuels concerns over the economic recovery.
In a separate report, the Labor Department reported that core consumer prices increased by .3% last month, which is the highest monthly increase since 2006.  This increase has analysts concerned that the recent increase in food & energy prices may finally be seeping through to other products and services.  However, on an annualized basis the core Consumer Price Index only increased by 1.5% on a year-over-year basis which is not considered to be a threatening rate.  Since inflation is the primary driver of mortgage rates today’s report will not help mortgage rates to move lower.

Tomorrow we get a peak at weekly jobless claims and more manufacturing data.  For now I will shift my outlook to neutral.

Current Outlook:  neutral