Mortgage markets improved last week on weaker-than-expected data and a neither-good-nor-bad statement from the Federal Reserve.
Mortgage rates regained most of their lost ground after touching a 6-week high the week prior. Conforming mortgage rates were down last week.
News of the Federal Reserve’s announcement made headlines last Wednesday, but it was the less-reported stories that helped shape markets and improve home affordability.
For one, Consumer Confidence unexpectedly fell. This is a key gauge for economists and for Wall Street because, in theory, a confident consumer is more likely to buy goods and services — a key element in any economic recovery.
Other recovery-slowing news included:
- Retail Sales falling well short of expectations
- An increase in Initial Jobless Claims
To be fair, there were a handful of good-for-the-economy stories last week, too, but markets dwelled more on the negative ones. While the stock market’s 4-week winning streak was ending, investor cash was moving to mortgage bonds, causing rates to fall.
This week, there isn’t much data with which traders can play so expect mortgage rates to trade on emotion and momentum instead. This is good for rate shoppers when mortgage rates are falling, but if they start to rise, last week’s gains could be wiped out in the span of an afternoon.
It’s happened twice like that already since Memorial Day.
If you’re not locked in to a mortgage rate yet, keep a watchful eye on the markets and your loan officer on speed dial. Remember — every 1/8 percent rate hike adds nearly $100 per $100,000 borrowed annually.