Evergreen Colorado Mortgage Market Update - RJ Baxter First Mortgage Corp
Last week saw quite a battle unfold between the bulls and the bears in the mortgage bond markets. Bond prices battled around the 200 day moving average all week, an important level of support or resistance that can effect mortgage rates long-term. Despite starting the week below the 200 day moving average, bonds closed Friday above this important trend line, which changed it from a resistance line to a support line. See chart below- this is a positive for home loan rates.
The net effect was that Evergreen Colorado Mortgage rates ended the week slightly better than the previous week and at the best levels we have seen since early December.
This week brings some interesting economic reports and activity that could have an effect on mortgage rates.
For one, there is a large amount of bond supply hitting the market. The Fed has been auctioning billions of dollars in bonds almost every week for months in an effort to raise funds for the many stimulus packages that have been approved. Additional supply can hurt mortgage bond prices and drive Evergreen Colorado Mortgage rates up.
Add to this the looming end of the mortgage backed security (MBS) purchase program by the Federal Reserve, and downward pressure could hit the bond markets this week. The FOMC policy statement will be released on Wednesday, so it will be interesting to see what they have to say about the MBS program in particular. The program is set to end on March 31st, but there have been rumors that it may be extended. An end to this program will certainly mean higher Evergreen Colorado mortgage rates for consumers.
I will be watching the 200 day moving average trend closely this week to see if the support line holds. With rates at great levels compared to the past month, it would be wise for consumers who have not already taken advantage of the great rates we have been seeing to refinance while they still can. With the MBS purchase program set to expire, and inflation threatening to come with a vengence, it is inevitable that Evergreen Colorado mortgage rates will go up.
More on inflation later this week...
Comments (1)Subscribe to CommentsComment