It is a very thinly traded day in the mortgage market. The good news is that buyers are currently outnumbering sellers – a condition that is almost always supportive of slightly higher prices and steady to lower mortgage interest rates.There is nothing of consequence on today’s economic calendar so mortgage investors are looking to global news and trading activity in the stock market for directional influences on the trend trajectory of mortgage interest rates.

A stronger-than-expected slump in German retail sales together with an announcement from the Spanish government that it was raising its expected budget deficit target for 2012 — breaching its previous commitment with its European financial partners — combined to create a modest “flight-to-quality” flow of capital out of Europe this morning into U.S. dollar denominated assets like Treasury debt obligations and agency eligible mortgage-backed securities.

Sluggish trading conditions in the stock markets may add a little support for steady mortgage interest rates to today’s trading action as stock jocks look to limit weekend risk by temporarily selling stocks and parking the proceeds from those sales in safe-haven assets like Treasury notes – a process that tends to be mortgage interest rate friendly.

Looking ahead to next week — Monday’s release of the February Institute of Supply Management’s Service Sector Index and Wednesday’s revised fourth-quarter Productivity and Unit Labor Cost figures will take a very distant backseat to Friday’s 8:30 a.m. ET release of the February Nonfarm Payroll figures. Most economists anticipate nonfarm payrolls grew by 210,000 last month while the national jobless rate held steady at 8.3%. If the actual nonfarm payroll number matches or exceeds this projection — look for mortgage interest rates to edge higher as stock prices climb. On the other hand, if the actual February headline payroll number posts a reading of 180,000 or less and/or the national jobless rate rises to 8.4% or more — look for stock prices to fall sharply — a condition virtually certain to prove supportive of steady to perhaps fractionally lower mortgage interest rates.

Mortgage Rates as of Friday March 2, 2012 ( purchase transactions )

30 day rate locks, subject to credit score and loan to value edits

FHA

30 year fixed 3.75% 0% origination fee or 3.5% with 1.0% origination fee

Conventional

30 year fixed rate 3.75% ( 30 day lock )

15 year fixed rate 3.125%

5/1 ARM 2.875%

7/1 ARM 3.125%

For mortgage questions or more detailed information, contact Bob Strandell at Bell Mortgage!