Lack of Economic News to Affect Rates
Mortgage markets improved last week overall, but *barely*. After making a sizable move lower through Monday, Tuesday and Wednesday, mortgage pricing jumped Thursday and Friday. Nearly all of the early-week gains were erased. That’s what just a little time the mortgage market will do to you!
There wasn’t much economic news on which for markets to trade last week. In its absence, bond traders took advice from the currency markets, among other economic news.
Mortgage rates are closely tied to the value of the U.S. dollar. This is because mortgage bond investors are actually repaid in U.S. dollars and, as the dollar gains value, demand for dollar-denominated bonds tend to grow. Wild the things you’ll learn, right?
More demand for bonds raises prices which, in turn, lowers mortgage rates.
Bond prices and bond yields always move in opposite directions.
The dollar was strong in the first part of last week, then weakened through Friday’s close with the G-20 meeting looming. Mortgage rates trended along similar lines.
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!
