Mortgage markets worsened last week, taking interest rates with them.
A steady drip of sour economic news plus concerns about the banking system outmuscled Fed Chairman Ben Bernanke’s congressional testimony in which he said the recession would likely end later this year.
Overall, mortgage rates have risen in 9 of the last 12 trading days.
This week, it’s unclear in what direction mortgage rates will go. However, it won’t be because of a lack of action.
The week starts with the 8:30 A.M. ET release of the Personal Spending report, a closely-monitored report that should make a broad market impact. Economists expect that spending increased in February, providing key support for economy.
If economists are wrong, though, and spending fell, it will cast doubt on the speed at which an economic recovery will occur. Consumer spending, after all, makes up two-thirds of the economy. No spending means no recovery.
Next, on Wednesday, the White House is expected to release the details of the Homeowner Affordability and Stability Plan. Again, markets are watching for the broader impact of the news. If analysts and traders deem the plan effective, watch for stock markets to improve and bond markets to weaken.
This would cause mortgage rates to rise.
Then, Friday, we’ll get to see February’s official jobs number. Job loss is expected to exceed 600,000 for the month and unemployment may reach 8 percent. On many levels, if the jobs data meets the expectations, it would be okay with respect to mortgage rates.
As always, it’s recommended that you float your mortgage rate cautiously. Wall Street is nervous for its turf and hyper-sensitive to Beltway influence. Markets can change in an instant and when they do, they usually change for the worse.
This week, have a game plan. It’ll be easier to take advantage of daily mortgage rate movement.
