Mortgage Rates Dipped On Fed Minutes

Mortgage rates have had a nice week.

We were staring at higher rates on Wednesday and then the week took a turn for the better.   Wednesday afternoon saw the release of the April meeting minutes and it ignited a 2-day rally.

It was great news for home buyers and would-be refinancers.  Mortgage rates continue to hold at multi-year lows.

The Fed Minutes are the well-detailed recaps of the FOMC meeting.  They are usually 10-15 times longer than the short post-meeting press release.   The press release is like the movie trailer, the minutes are like the original book (the pre-made-for-big-screen version).

This insight into what our central bankers are thinking only comes out 8 times a year and it is always a market mover.  Last month:

• Greece:  Imagine this, Greece was a topic.  The Fed’s opinion,  a crisis in Greece could slow U.S. domestic growth.
• Housing:  Not good.   In a nutshell, you can’t use tax incentives to get out of a housing crisis.  You grow your way out of it with jobs.  That’s not happening.
• Mortgage Rates:   The Fed owns a staggering amount of mortgage bonds.  It sees little reason to sell right now.  That’s great for  mortgage rates.

This was not a happy meeting.  Spring is budding everywhere.  Unfortunately not in the economy over the short-term.  Mortgage rates dropped on the news. With Greece being a potential anchor on our economy, rates go down.  The problem is that, if Wall Street gets comfy on the Eurozone issues, rates skyrocket twice.  First because the safe-haven buying stops.  Second because it also is good economic news for all of Europe not to be entering a crisis.