Mortgage markets worsened last week on general profit-taking in the U.S. bond market, combined with talk of a coordinated rescue effort for Greece and its debt burden. Mortgage-backed bonds sold off, causing conventional and FHA mortgage rates to rise.
There
wasn't much hard data on which to trade last week, either, so momentum
took markets farther than they otherwise might have moved on their
own. It marked the first time in 5 weeks that rates rose for rate
shoppers.
This week, data returns. Expect mortgage market movement.
Some of the week's more important releases include:
Housing Starts and Building Permits (Wednesday)
The release of the last month's FOMC Minutes (Wednesday)
Business and consumer inflation figures (Thursday and Friday)
Inclement weather
may have impacted last month's Housing Starts reading so pay closer
attention to Building Permits. Permits precede actual construction and
can be more indicative of economic optimism. If permit readings are
strong, it should be a negative for mortgage rates.
The same is true for the FOMC Minutes.
Last
month's FOMC post-meeting press-release was decidedly
middle-of-the-road, but the statement is just a summary of the Fed's
2-day meeting, boiled down to a few paragraphs. Wednesday's release of
the FOMC Minutes will reveal the deeper discussions among members of
the Fed. Wall Street will mine it for clues about the future of the
economy.
If Wall Street senses optimism coming from the Fed -- again -- mortgage rates should rise.
And,
lastly, keep an eye on Thursday and Friday's inflation data. Inflation
is bad for mortgage rates so a higher-than-expected reading should
spark a bond market sell-off.
Since mid-December, mortgage rates
have moved within a tight range and there's little reason for rates
will break this range this week. However, we are near the top of the
channel. If you know you're going to need a rate locked soon, it's
probably best to do early in the week.
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