Good Afternoon,
There has been a mix of economic data released earlier this morning, as Initial Jobless Claims were reported worse than expected. This is especially disappointing after there had been some signs of improvement in the labor markets, based on the previously published reports.
Also, inflation at the wholesale level moved higher in April, driven by an increase in food prices. Any signs of increased inflation will be perceived negatively by the Mortgage Bond market, and as a result, Bond prices have been testing underlying support causing mortgage rates to consider increasing a bit.
On Tuesday, The Department of Housing and Urban Development's Federal Housing Administration said it will allow first-time homebuyers to use the federal tax credit of up to $8,000 for a downpayment at closing, via a secured instrument outside the main purchase mortgage. Since it is still in its infancy, I will keep you posted when more details of this new program are released.
For now, I recommend floating while Bonds continue to test underlying support. I will let you know if a change of course becomes necessary. In the meantime, I hope that you enjoy the rest of your day. If there is ever anything that I can do for you, please let me know.
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