Mortgage Rates Uncertain, Looking for Direction
Image via Wikipedia
After a couple of weeks of heading higher, mortgage rates have dropped a bit. On the assumption that the economy would soon be picking up (leaders have been excited about “economic green shoots”), speculation about inflation has been seen. This speculation has been leading to higher mortgage rates. However, last week saw inflation reports leaning toward low inflation, and that has given mortgage rates pause in their climb.
For the most part, though, the direction of mortgage rates is largely uncertain. Financial markets and others will be looking at economic data, including Treasury auctions, due out this week. (In fact, two T-Bill auctions are happening right now.) The outcomes of economic announcements and auctions are likely to influence where mortgage rates go from here. Lenderama offers some helpful hints on where to look for direction on mortgage interest rates:
Currently, there are no scheduled speeches, though that is likely to change as the week progresses. The two main events are clearly the FOMC decision and the PCE on Friday (included in the Personal Income and Outlays report). However, as we have seen in recent history, some other reports such as GDP and Consumer Sentiment have had increased effects on the markets, and the Treasury Auctions will surely have some impact as well. Remember that when the FOMC makes its announcement, don’t focus on their decision regarding the Fed Funds Rate, instead you should dissect what they are saying within the released Policy Statement.
Chances are that mortgage rates will go higher in the near future, but it will take some time for them to reach the levels that they were at prior to the subprime lending crash and the financial crisis. For quite some time, mortgage rates are likely to remain relatively low, providing good incentive for those who are looking to buy a home right now, while prices are low and mortgage terms are favorable.
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=c48438dd-0df1-46e4-90fc-a993144e3f9c)
