Mortgage markets finished out the week unchanged last week but that’s not to say that mortgage rates stayed flat.
From day-to-day, mortgage rate shoppers were on a veritable roller coaster.
- Monday and Tuesday, rates dipped
- Wednesday and Thursday, rates surged
- Friday, rates retreated
Overall, conforming mortgage rates carved out a half-percent range this week. This caused fit for home buyers in need of a rate lock, and homeowners interested in refinancing.
Rates changed quite a bit from day-to-day, and even from hour-to-hour at times.
This is the same brand of mortgage rate volatility we’ve seen all year and it’s expected to continue through at least this week, too. There are a number of market-moving events set to hit.
The event with the largest potential impact is the Federal Open Market Committee’s two-day meeting.
Scheduled for Tuesday and Wednesday, the Bernanke-led Fed is not expected to raise the Fed Funds Rate upon its adjournment but the markets are more interested in what the Fed says than what it actually does.
If the Federal Reserve says that long-term inflation is a concern, mortgage rates should rise because inflation often leads rates higher. Similarly, if the Fed says the economy is recovering quicker than expected, mortgage rates should rise on that story.
The Fed adjourns at 2:15 PM Wednesday so watch for big market swings around that time.
In addition, there’s some big data points due out this week including the Existing Home Sales and New Home Sales reports, plus the Personal Spending and Consumer Sentiment survey.
Each of these reveals the psychology of the U.S. consumer and consumers with dollars to spend move the economy forward. If the reports are overwhelmingly positive, mortgage rates should rise as a result. On the other hand, if the data is weak or non-convincing, mortgage rates should ease.
