First Time Home Buyers
Interest rates improved last week on continued problems in Europe, a disappointing jobless figure, and relatively low reading on domestic inflation.
FHA and conforming rates both saw lower rates causing a surge in refinancing activity. For a brief moment on Thursday, mortgage bond prices reached their best levels of the year. The market corrected by Friday morning and this week will be loaded with both data and rhetoric. For interest rates, the combination of data and rhetoric can be a dangerous combo.
The biggest news of the week is the Federal Reserve’s 2-day meeting, scheduled for Tuesday and Wednesday in Washington D.C.
The Fed is expected to hold the Fed Funds Rate in its target range near 0.000-0.250 percent. As always, what the Fed does is irrelevant. It’s what they say that will drive this week’s mortgage rate movement. They’re going to paint a picture of the economy moving forward, covering jobs, growth, and inflation.
If that picture is bright and sunny, rates rise. If that picture is gloomy, rates hold.
Data will also drive mortgage rates this week.
There’s key data due for release next week, too:
- Tuesday : Existing Home Sales and Home Price Index
- Wednesday : New Home Sales
- Thursday : Continuing Jobless Claims
- Friday : GDP and Consumer Sentiment
Mortgage rates improved, but were relatively tame last week. This week, volatility should return.
If you’re shopping for a mortgage, rates remain very low but could reverse quickly. Your biggest risk is tied to the Fed’s adjournment Wednesday afternoon.
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