What Happened To Mortgage Rates Last Week
HUH?
I’ve had a few e-mails asking – So I’m going to explain why rates took a jump off the deep end last week and worsened roughly .25% in a short 4 day work week.
Why?
Does the word inflation sound familiar? Well, right out of the gate – on Tuesday inflation was a concern with the consumer confidence report indicating that consumer inflation expectations are at an all-time high. Meaning that consumers are seeing inflation as a real threat to their own financial situation. Scary stuff huh?
Scary, Sure… Tell Me The Technicals…
Well, rising energy costs and worldwide inflation fears continued to push bonds (mortgage backed securities) lower. So low that they moved below a tough technical floor (I’m a charts guy) of support at the 200-Day Moving Average. This is extremely important because mortgage bonds have now officially made it over the 200-day Moving Average. Only on three separate occasions within the past three years has this happened. This means that barring a timely reversal, we are likely seeing a shift in the market towards higher home loan rates.
The Good News..If There Was Any…
On a better note, Friday brought a little good news on inflation. The core personal consumption expenditure (PCE) index showed that inflation does remain within the Fed’s comfort zone. Mortgage bonds (home loan rates) improved somewhat on the news, but the obvious trend for the week was definitely worse overall.
Inflation… I Think I Read That Somewhere…
I’ve been talking a ton about inflation in the past few months. It finally came into the traders view and they reacted accordingly!
Did You Miss An Opportunity? Let Us Help!
Hopefully after that, you have a better understanding of what the heck happened last week! If you’ve missed an opportunity to refinance in the past few months, it’s more important now than ever to get your mortgage under management. I’d be glad to help if you’re mortgage isn’t currently getting the attention it deserves.
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