In a week packed with mortgage news and economic data, mortgage rates swung hard in both directions last week before settling into the weekend slightly higher across the board.
Adjustable-rate mortgages worsened more than their fixed-rate counterparts and both broke a two-week streak in which mortgage rates had improved.
But, if we look at all of the big stories of last week, there was a dramatic overweight of news that is usually “good for rates”.
Those stories included:
- The Federal Reserve saying that inflation should moderate soon
- Oil prices falling 20 percent from July’s highs
- Home buyers propping up home sales levels
- Foreign investors wanting to buy long-term U.S. debt
- The U.S. dollar strengthening versus foreign currencies
In the end, it turned out that the news was so good, investors decided to jump back into the stock market, propelling the Dow Jones 3.6 percent to a 6-week high. This fevered trading action drew investor money away from the bond market — including bonds of the mortgage-backed variety — and that pressured mortgage rates higher.
And, of course, it didn’t help rates when the two biggest insurers of mortgage-backed debt posted large quarterly losses and warned of more delinquencies ahead.
Turning our attention to this week, make note that it is back-heavy on data. Therefore, expect the positive momentum of Thursday and Friday to carry through Monday and possibly Tuesday.
By Wednesday, however all bets are off — that’s when July’s Retail Sales data is released. Furthermore, Retail Sales is backed up Thursday by the Consumer Price Index, a Cost of Living measurement.
Both data points are correlated with inflation so higher-than-expected readings may cause mortgage rates to rise.
Regardless, given that mortgage rates are now moving more in a hour than they used to in a day, be prepared to get your mortgage rate quotes quickly and be ready to act on them.
Just 90 minutes later, the quote could be expired.