Meant to post this Austin Mortgage Blog entry yesterday:

The week has gotten off to a slow start with the 10 year note off slightly and mortgage backs following suit.  The stability can be linked to month/quarter end adjustments by money managers and hedge funds to bring their bogey in line with the Barclays Index.  That buying should continue through tomorrow as the index needs are .16 years (duration add).  Earlier today, Personal Income/Spending hit the tape unchanged and up .3%.  Economists were looking for Income to be up .1% and Spending to be up .3%.  No great shakes here.

The balance of the week could get a little dicey however with Housing and Consumer Confidence tomorrow, ADP Employment “guess” on Wednesday, Construction Spending, ISM Index, and Weekly Claims on Thursday, and Big Daddy, the Employment Report for March front and center on Friday (7:30 am cst).

For now, the tactical bias is neutral/defensive into what the market feels is going to be a positive jobs number (plus 200K).  The weakness of the past few trading days has changed the trend to bearish.  The little bit of stability we’re seeing is only due to month end.  That can only mean one thing as seller are waiting in the wings.  We would advise borrowers to lock their Austin mortgage interest rates, expecting that we will see 4.0% on the 10 year note before we see 3.75%.  The interest rate landscape (lower Austin mortgage rates) is not over, just on hold.

Given the Fed’s exit from MBS purchases, their steering of quantitative easing ala Austin mortgage rates hike sooner than later, and a fragile housing market that must be content will mean more inventory and less stimulus, a case for the double dip can certainly be made.  That scenario has a high probability (in our opinion) and brings with it lower Austin mortgage rates.

Hang in there.