After carving out wide trading ranges on most days, mortgage pricing ended the week slightly worse overall.
From an economic standpoint, though, last week was an interesting one.
- Existing home sales showed unexpected strength.
- New home sales showed unexpected strength.
- Data showed home prices rising unexpectedly.
In addition, consumer confidence rose unexpectedly, too.
To rate shoppers, these "unexpected" developments are warnings worth heeding because mortgages trade on expectations of the future. And "the future", you'll remember was widely expected to be an economic abyss.
This is one of the many reasons why mortgage rates are so low right now -- during uncertain times, investors flock to safe investments. But when those expectations change, mortgage rates usually do, too.
Our current recession has been thus far called "housing-led" and was predicted to last several years. Last week's data, however, provides at least some evidence that the recession may be ending; that the economy may find its way forward sooner rather than later.
Indeed, even members of the Federal Reserve now call for a turnaround starting in as few as 6 months.
For now, market reaction to the unexpected data has been tepid. Therefore, watch for developments over the coming weeks and -- perhaps more importantly -- keep an eye on the investor mindset. If bond markets start to sell-off en masse, don't be surprised if mortgage rates race higher by quarter-point leaps at a time.
Meanwhile, this week, the biggest data release is Friday's jobs report. It's expected to show unemployment reaching to 8.5% with another 656,000 Americans losing their jobs in March. As before, if the data isn't as bad as expected, watch for stocks to rise and mortgage rates to go with them.