InternationalMarkets & Economy

Rates holding is good news for housing

Big gains in jobs and a flicker of inflation might have reversed rates altogether -- thus, holding here is good news
  • The most reassuring sign for mortgages and housing: a damaging report did only modest harm.
  • However, the credit markets have overdone their hope for “no-Fed” for the rest of 2016. Data is strong enough that the Fed will have to take out some insurance -- probably not at its meeting on the 16th, but April and summer on the table again.

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The most reassuring sign for mortgages and housing: a damaging report did only modest harm. The 242,000-job surge in February payrolls could have blown us up, but the 10-year T-note today is 1.90 percent, mortgages still in the high 3s. The 10-year from New Year’s Day to mid-February fell in a straight line from 2.30 percent to 1.66 percent and was certain to re-trace. Big gains in jobs and a flicker of inflation might have reversed rates altogether -- thus, holding here is good news. Friday's report did lose force in its large number of jobs in poor categories (retail), and slim 2.2 percent year-over-year increase in wages. However, the credit markets have overdone their hope for “no-Fed” for the rest of 2016. Data is strong enough that the Fed will have to take out some insurance -- probably not at its meeting on the 16th, but April and summer on the table again. That sense of future Fed action is the only routine aspect of the forces in play. The drop in rates ...