Mortgage markets worsened last week as investors responded to a recovering global economy.
Despite briefly touching their lowest levels since May, mortgage rates ended the week dramatically higher.
It’s the second straight week that rates soared on a Friday.
For several months, Wall Street has been in limbo; undecided whether the economy is truly showing signs of improvement. Negative news has tended to sink rates while positive news has tended to do the opposite.
Lately, investors have been in search of signals anywhere signals can be found. Last week — sans hard-hitting economic data — those signals came from the worlds’ Central Banks.
Shortly after Australia raised its interest rates by one-quarter percent, Fed Chairman Ben Bernanke suggested that the Fed may raise rates sooner than expected. Stock markets rallied on the news and mortgage bond markets tanked.
When bond prices fall, rates go up.
This week, data returns. Expect more volatility.
Mortgage rates have been very low lately, but they remain jumpy. Rates change fast and if you’re not ready for them when they fall, you’ll likely miss your chance to catch the bottom.
Rate shoppers in need of a lock should remain in ready-position. As we’ve seen over the last 2 weeks, when rates start to rise, they tend to rise in a hurry.