We will continue to float Mortgage Rates, as Mortgage Bonds desperately cling to support. Mortgage Bonds declined today and fell for the week after failing
to break above resistance levels from mid-November. Better than expected Consumer Sentiment coupled with rising Stocks the culprits behind the move
lower. The Bond finished at 104.19 down 16bp, closing just beneath support at the 25/100/200-day Moving Averages. Stocks rose – the Dow was up 126.80 points to
16,154.39, the S&P gained 8.80 points to 1,838.63, while the Nasdaq had just a slim gain of 3.35 points to end the trading week at 4,244.02. Oil was last
seen at $100.27/barrel near unchanged.
Weekly Survey of Rates from the Mortgage Bankers Association
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.45 percent from 4.47 percent, with points increasing to 0.34 from 0.25 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.40 percent from 4.42 percent, with points increasing to 0.14 from 0.11 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.49 percent from 3.53 percent, with points decreasing to 0.25 from 0.28 (including the origination fee) for 80 percent LTV loans.
Yellen Says Recovery in Labor Market Far From Complete
Federal Reserve Chairman Janet Yellen said more work is needed to restore the labor market to health and pledged to maintain her predecessor’s policies by scaling back stimulus in “measured steps.”
While growth has picked up, “the recovery in the labor market is far from complete,” Yellen said today in the text of remarks to the House Financial Services Committee. “I am committed to achieving both parts of our dual mandate: helping the economy return to full employment and returning inflation to 2 percent while ensuring that it does not run persistently above or below that level.” Read more
Economic News
Retail Sales in January fell by 0.4% versus the 0.0% expected. Retailers cited the harsh January weather for the decrease, which slowed shopping and auto buying. It was the second straight monthly decline.
Optimism among owners of small business in the U.S. crept higher in January, continuing a trend, amid hopes for higher sales. The National Federation of Independent Business’s small business optimism index rose to 94.1 from 93.9 the previous month. It was the third straight month in a row that the index has improved.
Despite the upbeat direction, the NFIB said in a statement that the “index is still just treading water.” The industry group said its real sales expectations subindex jumped to 15 percent in the month. Hopes for an increase in sales resulted in expectations of a pick up in hiring. The employment-plans subindex climbed to 12 percent, its highest level since 2007. The NFIB said small firms added an average 0.12 workers per small business in the last three months.
U.S. weekly claims for unemployment benefits totaled 339,000, while retail sales in January fell 0.4 percent. Economists had expected initial claims to dip to 330,000. Meanwhile, January retail sales were expected to fall by 0.1 percent, against the prior month’s 0.2 percent rise.
Economists in a consensus survey expected business inventories to rise by 0.4 percent in December, the same rate of increase as November.