Mortgage markets reacted poorly to not-as-strong-as-expected housing data and employment data last week causing mortgage rates to rise on the week overall.
It was the third time in 4 weeks that mortgage rates were up.
To the detriment of rate shoppers, mortgage rates were especially volatile Thursday and Friday.
As an increasing number of traders punched out ahead of the 3-day weekend, the mortgage pricing swings grew wider and wider. Rates were at their lowest last week on Wednesday morning. By Friday, some mortgage rates were higher by as much as 3/8 percent.
This week, with traders coming back to work, the pace of change should slow a bit, if not for the volume of closely-watched data expected to be released.
The data with the largest potential impact on mortgage rates this week is related to the housing market. There will be 3 separate reports — each expected to show that housing is still weak, but not as weak as it was.
- Tuesday: Case-Shiller Price Index
- Wednesday: Existing Home Sales
- Thursday: New Home Sales
However, because real estate is local in nature and these reports are broadly national, it’s important to not read into them too much. They’re good for an overview but shouldn’t be used as the basis for an offering price.
In addition, there will be two consumer confidence surveys released — one on Tuesday and one on Friday.
Consumer surveys can be important in a recovering economy because as confidence rises, spending often does, too, and consumer spending represents two-thirds of the U.S. economic engine. If confidence is rising, expect the stock market to benefit and the mortgage bond market to suffer.
This would lead mortgage rates higher.
It’s unlikely that mortgage markets will display the same volatility this week as compared to last week, but that doesn’t mean that mortgage rates won’t change. With so much data crossing the wires in the next 4 days, it’s likely that Friday’s rates will be different from today’s.
Therefore, if you’ve found a rate and payment with which you can be comfortable, consider locking it in. It’s unlikely to last long.