February 18, 2013: This week; January housing data; starts and permits and existing home sales all a little softer than Dec data. Likely in part due to the realization the SS payroll tax increase hit although December data was quite good in itself. January inflation data with PPI and CPI, both are well within the Fed’s range so not likely to see much reaction. Thursday the Feb Philadelphia Fed business index is expected to show improvement, and it is Feb data that will draw attention. Wednesday at 2:00 the minutes from the 1/31 FOMC meeting will be released; recall when the Dec minutes were released there was talk within the group that the Fed was beginning to discuss possible plans on how to unwind the QEs when the time comes (certainly not likely anytime soon). The minutes will get a lot of attention and debate within markets.
The 10 year note yield is still hugging 2.00% levels while the US stock indexes are presently marking time with not much change last week. Talk still exists that the indexes may run to new all-time highs before any anticipated correction that even the most bullish are expecting. Interest rates are unlikely to decline unless equity markets slip and there is a momentary change in the bullish sentiment that presently dominates the stock market.
What does all this mean? Mortgage rates have inched up a little over the last several weeks as the markets are supporting the recovery. Unless we see some declining economic numbers in the coming days or the stock markets go through a minor correction, we will see mortgage rates test new highs in the coming weeks.
Have a Wonderful Day!
Bill Nickerson
Vice President Mortgage Network Inc
179 Great Road, Acton MA 01720
978.273.3227
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