Houston's Rate Sheet

Rate Watch

Employment Numbers as expected, Mortgage rates move slightly higher

Although a short week, last week’s economic calendar was action packed. The Employment Report is always enough to keep investors on their toes. The report for June showed continued economic contraction. However, the contraction was mild and inline with expectations. The economy lost 62,000 jobs in the month of June, and the unemployment rate held steady at 5.5%. Wage inflation appears to be under control. The Average Hourly Wage increased only .3%, which was inline with the Wall Street consensus.

This morning, Bankrate.com’s overnight average on the 30-year fixed rate mortgage came in at 6.26%, up only 3 basis points from last Monday’s 6.23%. Shorter-term rates faired much better than the 30-year fixed. The 15-year fixed rate mortgage fell 1 basis point to 5.78%. The 5-year Adjustable Rate Mortgage averaged 5.58%, down from last week’s 5.79%.

This week’s economic calendar will be much less busy than last week’s. Most investors will be watching closely as Federal Reserve and Treasury Officials enlighten us with words. On Tuesday, Fed Chairman Ben Bernanke, Fed Governor Jeffrey Lacker, and Treasury Secretary Henry Paulson will all be giving speeches on the economic outlook and policy. On Thursday, Chairman Bernanke and Secretary Paulson will testify to the House Financial Services Committee. Investors will be looking for clues on the future direction of the Fed and Treasury’s policies regarding interest rates and the US dollar. The weakness of the dollar has contributed to growing inflation and high oil prices.

With little data on the horizon, it is difficult to predict where mortgage markets will go. It is important for borrowers to be vigilante when deciding when to lock in their mortgage rate.

posted by Vincent Biondillo @ 2:17 PM