Sun State Savings

Mort­gage mar­kets improved last week as news from the Fed­eral Reserve, the U.S. econ­omy, and Europe com­bined to spur new demand for mortgage-backed bonds.

Con­form­ing mort­gage rates ral­lied from Wednes­day through Friday’s close, end­ing the week near all-time lows set ear­lier this year.

Last week’s rally was sparked by the Fed­eral Open Mar­ket Committee.

After its first meet­ing of the year, Chair­man Ben Bernanke & Co. changed its pro­jec­tion for “excep­tion­ally low rates” to at least late-2014. Pre­vi­ously, the Fed had said its bench­mark Fed Funds Rate would remain low until 2013.

This, in con­junc­tion with the Fed’s mes­sage that fur­ther eco­nomic stim­u­lus may be com­ing, led Wall Street investors to increase their bets on mort­gage bonds, push­ing up prices and push­ing down yields.

Lower yields means lower rates.

Mort­gage rates were also helped lower by mixed data on the U.S. econ­omy includ­ing weaker-than-expected hous­ing reports, and another set­back in the Greece sov­er­eign debt negotiations.

Each time that Euro­zone lead­ers have failed to reach an expected accord with Greece since 2010, mort­gage rates have dropped. Last week was no different.

This week, with a large amount of U.S. eco­nomic data due for release and a high-profile sum­mit among Euro­pean Union lead­ers, mort­gage rates are poised to move. Unfor­tu­nately, we can’t know in which direction.

Some of the news that will move mar­kets include :

• Mon­day : Per­sonal Con­sump­tion Expenditures
• Tues­day : Con­sumer Con­fi­dence; Case-Shiller Index
• Wednes­day : Con­struc­tion Spending
• Thurs­day : Weekly Job­less Claims
• Fri­day : Non-Farm Payrolls;Factory Orders

Of all of the eco­nomic releases, Friday’s Non-Farm Pay­rolls has the most poten­tial to move mar­kets. More com­monly called “the jobs report”, Non-Farm Pay­rolls details the monthly change in national employ­ment and the national Unem­ploy­ment Rate. 

Jobs are believed to be the key to U.S. eco­nomic recov­ery so strength in jobs should result in higher mort­gage rates through­out and the country.

Mort­gage rates remain very low. If you’re ner­vous about mort­gage rates ris­ing this week or next, it’s as good of a time as any to lock your rate with a lender, and start mov­ing toward closing.

Tags: Eurozone, FOMC, Non-Farm Payrolls

This entry was posted on Monday, January 30th, 2012 at 6:45 am and is filed under Mortgage Rates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.