Mortgage Rates For King of Prussia and Nation- What Ahead For The Week Of April 25, 2011
Mortgage markets improved slightly through last week’s holiday-shortened trading sessions. Better-than-expected housing data led mortgage rates higher Tuesday and Wednesday, but rates retreated Thursday morning in advance of Good Friday.
Markets were closed Thursday afternoon and Friday. They re-open this morning up higher than its previous close. The DOW Jones is currently in the negative and mortgage markets are still higher. This could spell for better rates and/or fees today.
Conforming mortgage rates in King of Prussia ended last week unchanged overall. It’s a strange outcome considering that Standard & Poor’s issued a downgrade on U.S. debt Monday. In most instances, a debt downgrade would lead investors away from a particular group of securities — in this case, a group that includes mortgage-backed bonds. However, Wall Street reacted in the opposite.
When S&P issued its opinion, however, mortgage bonds rallied.
Some say this is because the downgrade will force Congress to address a rising debt-load; others think a downgrade slows growth which, in turn, slows down inflation. Both scenarios are considered a positive for mortgage bonds. Hence, mortgage rates fell.
This week, momentum could reverse. In addition to a slew of housing and economic data including New Home Sales, Pending Home Sales, and Consumer Confidence data, the Federal Open Market Committee is meeting for the third time this year. And this month, the FOMC is meeting a little differently.
As far as New Home Sales Today, sharp declines in the weekly mortgage purchase application index strongly suggest demand for new homes remains sluggish - a condition that will surprise no one. This data will likely exert little, if any influence on the direction of mortgage rates today.
When the Federal Open Market Committee (FOMC) gets together, it adjourns and releases a press statement to the markets at 2:15 PM ET. This month, though, the FOMC will release its statement at 12:30 PM ET, and then Fed Chairman Ben Bernanke will hold a press briefing at 2:15 PM ET to address the aforementioned statement. He’s expected to add growth forecasts to the official FOMC release, among other items.
Whenever the FOMC meets, mortgage rates can be volatile. This week, with the new press briefing format, that volatility is even more likely.
If you’re floating a mortgage rate or wondering whether to lock, mortgage rates will be at their “calmest” levels of the week Monday and Tuesday. Once Wednesday hits, and the FOMC statements begin, expect for rates to change.
Economic Calendar c/o Market Watch
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