Weekly Mortgage Overview: 1/14/2013

By January 14, 2013Mortgage Overview

This week, after little news last week, there will be a number of reports to digest. Nothing on Monday, but through the week retail sales, PPI and CPI, two reports on the status of manufacturing, and housing starts and permits. On Wednesday the Fed will release the Beige Book, the Fed’s detailed report on the economy from the Fed districts. Congress is due back to begin debates on the debt ceiling, spending cuts and entitlement reforms. Biden is set to deliver his report to Obama on gun control that will surely get attention, but not much influence on the markets.

Since the higher spike on rates that was triggered by the FOMC minutes from the December meeting that indicated the Fed was beginning to think about an exit strategy of the easing moves, the bond and mortgage markets have settled and backed off from the extreme high rates seen on Jan 4th; however, the bond market remains technically bearish. We continue to hold our outlook that rates will not increase much more from present levels; possibly 2.00% on the 10 yr (presently 1.85%). Mortgage rates should hold at current levels with worst case another 10 basis points from present levels. Look for additional improvement this week.