So what’s ahead in 2011? No one knows for sure. We do know that treasury and mortgage pricing will be looking for clues. Clues as to whether or not the economy is really expanding or needs more time to clear the mine fields.
This country needs to see jobs growth of at least 250K per month just to break even. That will take time allowing Austin mortgage rates to stay low into yearend and beyond.
Given that we are at the best levels in a month, your timing couldn’t be better in front of such a high profile release. We’ll preview the Employment Report early this afternoon.
Not to say we will not see lower Austin mortgage rates and better pricing but for that to come to fruition, we’ll need a major catalyst. Something like a stock market rout or collapse of Greece. In English, the smart money will bet against this, at least for a corrective trade that could take the 10 year note back to 3.25%. Pricing was struck with MBS unchanged, now down 5/32’s. Trigger fingers are getting twitchy.
It will become more and more difficult to improve Austin mortgage pricing/ lower yields without new fuel (catalyst). At the same time, the economic fundaments do not support higher Austin mortgage rates or worsening mortgage pricing. So, expect Austin mortgage rates to stay low for some time to come.
Last Tuesday's S&P Case-Shiller home price index reported that homes in 20 major U.S. cities were WORTH MORE in February 2010 than they were in February 2009 -- the first year-to-year INCREASE in values in over three years! The good news of this 0.6% annual gain was tempered by a small monthly decline in prices from January to February. But remember, February's unusually stormy weather make it a tough month for real estate in much of the country. ??Corroborating Case-Shiller, a second home price index also showed a national gain in home prices for February 2010 compared to February 2009. This was the First American CoreLogic HPI, an index including distressed sales, which reported a home price increase of 0.3% for the year.
During a very light week for economic news, the economic data and Treasury auctions contained few surprises and produced little reaction in mortgage markets. Austin mortgage rates ended the week nearly unchanged.
Tomorrows 10 year and Thursday’s 30 year bond auctions will tell the tale of the tape. Technically, the market is trading within the range formed since last Friday. We see the action as neutral but cautious.
Treasury Secretary Geithner is medium rare as the House Oversight Committee is grilling him on AIG. Undisclosed documents, backroom deals, maybe a cover up coordinated with Sir Bernanke, and the counter parties all paid off at par (by the taxpayers) are the hot topics.
Bill Gross, Pimco’s bond god, said the decisions were based on their view of the dollar’s direction (negative) and increased government debt. All of the above has been good for mortgage pricing and bad for your 401K.
