Mortgage rates rose slightly last week but the average 30 year rate only hit 3.83% according to Freddie Mac’s weekly mortgage survey. Rates have been in the sub-4% range since the week of November 20.
On the economic front, the U.S. economy is still the worldwide bright spot and Wall Street enjoyed a nice run as the holiday week closed out. Trading was light due to the holidays yet the Dow closed up 23.50 to a record 18,053.
Mortgage rates had been trending downward over the past six weeks and could have fallen further last Friday had stocks not drawn so much attention.
Economic woes overseas both in Asia as well as Europe have kept funds flowing into the United States. This helps keep rates low.
The 30 year mortgage rate began to rise along with Wall Street, signaling a potential shift back to a more traditional pattern with stocks rising as bonds weaken.
There are only two official reports, the ISM Index and Construction Spending, both released this Friday. Other than that, it’s a quiet week.
The Fed is continuing its dovish approach to rates with carefully prepared comments. Still, last Thursday the Dow experienced its single largest surge in three years after the Fed noted their approach to interest rates are still tilted toward leaving them where they are.
Watch for December’s Unemployment Report, to be released Friday January 9. If it shows that more than 300,000 jobs were created, the 30 year mortgage rate could bump up closer to 4.0%.