Good News for the Economy is Bad News for Rates
Mortgage markets performed horrible last week as losses piled up day by day. It marked the second straight week of sell-offs in the mortgage world.
Pricing was influenced in several areas, including better-than-expected economic data, the end of the Federal Reserve’s mortgage buyback program, and a short trading week.
Mortgage rates rose to their highest levels since late-December last week. Bad news for “rate shoppers”, but if you’re looking long term, don’t let this spoil your fun.
Jobs Matter
The data from most anticipated story from last week — the jobs report — included a few good-for-the-economy surprises.
- Although payrolls fell 22,000 short of what was expected in March, they were boosted by +62,000 in revisions from January and February
- “Temporary Employment”, a leading jobs indicator — was up 313,000 in the last six months
- The average work-week and factory overtime both rose in March, a sign that hiring should increase soon
In general, what’s good for the economy is bad for mortgage rates and that’s one reason why rates spiked Friday. Employment is a keystone in the economic recovery and mortgage markets reacted accordingly.
Specifically, What Did Those Reports Say?
Each week, I put up an economic calendar of news coming out that following week. Here’s the what actually happened with those reports last week:
What Impacts Mortgage Rates?
If you’re looking to purchase or refinance a home, it’s important to know what moves mortgage rates. There are normally two major things that impact the direction:
- Economic News. (Like the calendar above).
- International News. (major events, pending legislation, war related news, etc).
- Stock Market. (Money flows from equities (stocks) to bonds when it seeks shelter).
What Are Rates Based On?
It’s been mentioned before, but as a common reminder – mortgage rates are only based on one thing, Mortgage Backed Securities (MBS). The only way you have access to these is through live bond quotes.
Looking For Mortgage Rates?
If you’re looking for specifically what mortgage rates are doing, I’d be happy to help with a custom rate quote. Each scenario is different (there are 27 different factors a mortgage rate is determined by). If you or someone you currently know are looking for a mortgage, I’m here to help!
Information without obligation. That’s my policy. If you like what you hear, my team and I would love to help you out with your mortgage! Our contact information is on the top right hand side of this page!
