Mortgage pricing slipped under the 100 day moving average yesterday.  The last time that happened was October 5, and rates moved up about 1/4% over the next six weeks.  Pricing has declined again this morning.  Although we look at the technical picture only in the absence of “real” news (as opposed to “fake news”), movements like today have a marked impact on direction of interest rates.  Evidence of economic growth (or at least the hope for growth) will be required to see interest rates move meaningfully higher from here.  Such proof typically comes slowly over time.  Here is today’s data:

The Producer Price Index rose 0.5% last month, to a year-over-year increase of 2.5%.  Increased manufacturer’s costs do not always lead to increased consumer costs, but we’ll get that number tomorrow.  Also, Initial Jobless Claims were reported at 236,000; a slight drop from last week’s 238,000.  The employment picture keeps getting better.

Bad News/Good News

The thing about being in the mortgage business is that you get this twisted viewpoint about about world turmoil that goes something like this: “Ah, the Chinese stock market crashed again last night and the US equities look to open down 400 points?  That means rates should be better today.”  “Ooooh, Wal-Mart is closing 269 stores and laying off 16,000 people? Nice, that means that interest rates should stay low this week.”  “Wow, the Consumer and Producer Price Indices dropped again?  That means that the economic outlook is turning sour which should mean that home prices are stabilizing too and that now is an even better time to purchase a home–especially with these low interest rates.”

Some might say that I have a one track mind, but I’d like to think that I am just looking for the bright side of things.  The alternative seems pretty dismal tight now.