Mortgage rates are somewhat restrained today as the Fed begins its two-day meeting.

As reported by the Census Bureau, Housing Starts -- defined as the number of units for which construction began -- surprised to the high-side, despite a cold February.

The 9% increase over January showed relative strength, but when compared to February 2006, the number of starts is down 28.5% year-over-year.

This data points to an overall slowing in the housing market.

Supporting the slowdown, Building Permits are also down. That data point registered a 2.5% decline versus last month, and a 28.5% decline versus February 2006.

Market mentality is that the FOMC will look at today's housing data as indicative of a general housing slowdown, and that is generally good for mortgage rates.

Traders will stop short of placing heavy bets, though, so until tomorrow afternoon's FOMC press release, expect general malaise and flatness in mortgage rates.

(Image courtesy: Wall Street Journal)