We have been having a pretty nice run as of lately, I’ll have to admit:
Mortgage rates are super low, home prices are stabilizing, free $$$ from the government is going in our back pockets, and best of all, spring’s right around the corner.
Now that the economy is headed a bit more in the right direction, “mortgage-rate-reality” is going to start setting in for a lot of folks.
“Damn, Tommy – That 5% sounded really good last month. I wish we would of locked it in.”
“Yes, Mr. Johnson, I was telling you this, but remember you were telling ME that you were expecting that 3% , as well as the return of Growing Pains? Well look at us now. No Kirk and no 3%.”
Just last week, mortgage markets worsened with the little economic news that came out. It just wasn’t enough to push markets in either direction and the momentum trading and re-balancing of portfolios drove mortgage rates higher, on average.
FHA and conventional mortgage rates in Texas rose last week, marking the first time that’s happened this month.
Like I said before, mortgage rates have been on impressive streak and are priced far better than what most experts predicted.
Weaker-than-expected economic data is one reason why. Lack of economic data may be another.
This week, however, data returns.
- Monday : Industrial Production and Home Builder Index
- Tuesday : Housing Starts and Building Permits
- Wednesday: Consumer Confidence
- Thursday : Producer Price Index and Initial Jobless Claims
- Friday : Consumer Price Index and Continuing Jobless Claims
And, as if all that weren’t enough to spook you, the Federal Open Market Committee meets for a scheduled, 1-day event Tuesday (tomorrow).
The Federal Reserve is expected to vote to hold the Fed Funds Rate in its current target range near 0.000%, but that doesn’t mean mortgage rates won’t change. Markets are responsive to the FOMC’s post-meeting press release and any clear talk of economic strengthening can easily drive rates higher.
A friendly reminder: The Fed does NOT control short-term mortgage rates, only the Fed Funds Rate. This is the overnight lending rate that banks charge each other.
So basically, this week Wall Street is in Wait-and-See Mode with plenty to look at.
If you’re floating a mortgage rate, or waiting to lock, be prepared for wild swings – especially leading up to Tuesday afternoon’s FOMC adjournment.
Now’s the time to work with a mortgage professional that understands all this mumbo-jumbo and can get you a great deal, especially with all this volatility going on.
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Tommy is a senior mortgage consultant with Envoy Mortgage. For a free mortgage consultation, you can email him at
tommy@tr-mg.com. You can also find him on Twitter at @RightMtgGuy.
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