Mortgage rates for a 30-year fixed mortgage continue their downward trend, ending the week at 3.73%, down from 3.87% the previous week, Freddie Mac reported.
The 15 year note dropped a full 10 basis points from 3.15% to 3.05%.
Current rates are very near historic lows set in 2013. On January 3, 2013, Freddie Mac reported the 30 year average held at 3.34%.
The much awaited unemployment report for December was released last Friday. The unemployment rate fell to 5.6%, and a higher-than-expected 252,000 jobs were created. The initial response was greeted warmly by Wall Street but it didn’t take long for the bears to chew apart the numbers.
What disappointed investors the most was the decrease in hourly earnings, declining by 5 cents per hour. Instead of a stock rally, investors quickly turned and Wall Street ended down by triple digits to finish at 17737.
Mortgage bonds were the big beneficiary as investors left equities and turned to securities. Mortgage bonds attract investors with signs of a faltering economy.
For the week, the FNMA 30 year 3.50 coupon finished up 17/32, driving down mortgage rates to their current lows. We’ll see if mortgage rates continue their rally as this week’s bag of economic reports could provide further momentum.
This week we’ll see Retail Sales, PPI and CPI data among a host of other reports. The jobs report pulled back an otherwise steady recovery and going into the week, the Dow may not have the momentum needed to start another rally. If that is indeed the case, mortgage rates might very well drift closer to historic lows.