Mortgage Rates May Become Volatile

This holiday shortened week should be interesting for mortgage rates. Investors will be repositioning their portfolios with the end of the first quarter looming. Additional pressure on the market is expected as the Federal Reserve concludes its direct purchase of mortgage backed securities program (1.25 trillion, yep trillion with a T). The big question mark looks like non farm payrolls (due out Friday). Rumor in the market is that barring higher than expected unemployment (9.7% to 9.8% range) there is very little chance of rates moving lower. By contrast any better than expected news could trigger a major rally in the stock market and typically that tends to drag mortgage rates higher.