Mortgage rates yesterday improved from the pricing lenders were offering on Tuesday morning but were a few basis points above the levels seen after lenders repriced for the better on Tuesday afternoon. While it seems like headline news and unexpected events have created a lot of interest rate volatility, mortgage rates have generally kept to a tight range this week.

We only received one piece of economic data today: Weekly Jobless Claims

This data provides three measures on the health of the labor market: 

1. Initial Jobless Claims:  totals the number of Americans who filed for first time unemployment benefits
2. Continued Claims:  totals the number of Americans who continue to file for benefits due to an inability to find a new job
3. Extended and Emergency Benefits: totals the number of Americans who have exhausted their traditional benefits and are now receiving extended and emergency benefits

Since our economy is driven by consumer spending, economists track employment data to get a sense of future economic momentum.  Higher jobless claims lead to less consumer spending, which is bad for the overall economy but generally helpful in keeping mortgage rates from rising.

Initial claims for unemployment insurance fell 11,000 to 448,000 in the week of April 24.  Economists were expecting first time claims to fall to 445,000.   Continued claims fell 18,000 to 4.645 million, also above the 4.61 million that was expected.  The number of Americans who have used up their traditional benefits and are now collecting Emergency Benefits fell by 91,000 to 5.4 million.   Despite the worse than expected numbers, this was the third consecutive week that jobless claims have moved lower. AQ discussed how this data could play a bigger role in next week's official Employment Situation Report. READ MORE

The results of the last Treasury auction of the week were released at 1pm.  The Treasury sold $32billion 7 year notes with great success as overseas buyers showed up in droves. We speculate this may have something to do with overseas central bankers looking to protect their reserves in dollar-denominated assets. The U.S. dollar has greatly outpeformed the Euro in 2010 and is expected to continue to do so. HERE is more auction color.

Lender loan pricing is ever so slightly improved today. An afternoon MBS rally allowed a few lenders to reprice for the better as well, but overall mortgage rates are pretty much the same as yesterday.

Reports from fellow mortgage professionals indicate the par 30 year conventional mortgage rate continues to hold in the 4.875% to 5.125% range for well qualified consumers.  To secure a par interest rate on a conventional mortgage you must have a FICO credit score of 740 or higher, a loan to value of 80% or less and pay all closing costs including an estimated one point loan origination/discount/broker fee.  You may elect to pay less or no fees, but you will have to accept a higher interest rate.  No cost loans are in the 5.375% to 5.50% area. 

Lenders are offering aggressively low rates. I still favor locking all loans closing within the next 30 days as the strategy of “lock the price highs, float the price lows” continues to be successful.