Mortgage Forecast For The Week

After last week's star-studded line up of economic headlines, the week ahead will be a big change of pace, with a super slim economic calendar containing few scheduled releases to impact market movement. But in the absence of economic report activity, Traders turn greater attention to other factors, such as technical signals and other markets like Stocks.

Stocks have been on a blazing path higher, so investors have been pulling money from Bonds and moving them into Stocks to "get on the ride". And think about it - anytime the demand for something decreases, the price gets lower. (Think 8-track tapes and Walkmans.) So as the demand for Bonds gets lower in favor of Stocks, which are presently providing a much juicier rate of return, the price of unpopular Bonds gets lower and lower, meaning home loan rates are worsening.

So Stocks aren't helping matters much in terms of home loan rates - and technical factors really aren't running in favor of Bonds either. The chart below shows how Bond prices have been on an ugly downward sloping trend since May 8th. Again, this means that home loan rates have been moving higher.

What's ahead? Unfortunately, very likely more of the same...meaning home loan rates will continue to move higher, at least until some catalyst arrives to stop the ugly worsening trend.