Mortgage rates ended last week slightly better that at the start of the week Economic data was worse-than-expected almost across the board, except for jobless claims. VA, FHA and conforming mortgage rates in Virginia improved by just over one-eight of a discount point. Markets grappled with the
just-released Fed Minutes which weighed heavily on investors and on Wall Street.With the release of the minutes, it's increasingly clear that the Federal Reserve will end its support for bond markets on schedule in June, and that a Fed Fund Rate hike is possible within the next 12 months. Not surprisingly, the date of the Fed Minutes release -- Wednesday -- was the singular "down day" for mortgage markets last week. After falling for 4 straight weeks, Richmond mortgage rates appear to have troughed. This week they could rise, and there's no shortage of data on which for bonds for trade.
- Tuesday : New Home Sales; Speeches from Fed's Plosser and Bullard
- Wednesday : Durable Goods; FHFA Home Price Index
- Thursday : GDP; Initial Jobless Claims
- Friday : Core PCE; Pending Home Sales; Consumer Sentiment
There's other forces on markets, too. First, there are 3 bond auctions -- a 2-year, a 5-year, and a 7-year. Weak demand for any of the three will lead mortgage rates higher. And, second, this is a holiday week. Memorial Day is next Monday and, with the 3-day weekend ahead, expect large numbers of Wall Streeters to skip out on Friday (and likely part of Thursday, too). As the week concludes, therefore, bond volume will thin, amplifying mortgage rate movement -- up or down. If you're shopping for a mortgage, it's a good time to look at locking in. As the week progresses, mortgage rates should become less predictable and more volatile.
