What's Ahead For Mortgage Rates This Week : January 14, 2013

Mortgage rates rose last week nationwide during a week of sparse economic news.

Thursday's weekly jobless claims report showed 371,000 new claims, which was 1,000 fewer jobless claims than for the prior week. Wall Street expectations of 365,000 new jobless claims turned out to be too optimistic.

The semi-quarterly statement released Thursday by the European Central Bank (ECB) announced that the region's inflation remains below its 2 percent ceiling as established by central banker. Economic weakness in the Eurozone is expected to persist into 2013 with signs of recovery becoming evident toward the end of this year.

ECB cited financial and structural reforms as essential to economic recovery, and noted that national governments within the Eurozone have been slow to implement such reforms. Without such reforms, Euro-area economies may continue to struggle, which would likely lead investors to seek a safe haven in the bond market, moving bond prices higher.

As bond prices rise, mortgage rates in Maple Grove and nationwide typically fall.

Also last week, Freddie Mac's Primary Mortgage Market Survey reported the average rate for a 30-year fixed rate mortgage rising from 3.34 percent to 3.40 percent for buyers paying 0.7 percent in discount points plus closing costs. The average rate for a 15-year fixed rate mortgage rose from 2.64 percent to 2.66 percent.

Required discount points for the 15-year fixed rate mortgage rose from 0.6 to 0.7 percent.

Import prices for December released Friday were reported at -0.1 percent, below the consensus estimate of +0.1 percent. This report measures the prices of goods purchased in the U.S, but produced abroad and is considered an important indicator of inflationary trends affecting internationally produced goods.

Inflation tends to harm mortgage rates.

Next week's economic calendar is full of economic data and includes the release of the Producers Price Index (PPI), Retail Sales figures, the Consumer Price Index (CPI). The Fed is also set to issue its Beige Book report, and the NAHB Housing Market Index and Consumer Sentiment report will be released.

Mortgage rates remain low, but are rising.

What's Ahead For Mortgage Rates This Week : May 17, 2010

Mortgage markets improved last week -- but barely -- as ongoing doubt surrounding the health of Greece and the Euro pushed additional investors into safe assets, including mortgage bonds. 

Mortgage rates were wildly volatile between Monday and Friday before closing the week slightly better than their best levels of the year.

It's the 3rd straight week in which mortgage rates improved but that doesn't necessarily mean the trend for lower rates will continue. The last two times mortgage rates teased these levels, they immediately spiked higher.

It happened once in February 2010, and again, 4 weeks later in March.

This week, the same could happen.  After a week-and-a-half without much data of consequence, the newswires will be on overtime.

The first release to watch is Monday's National Association of Home Builder's Housing Market Index.  It's not a "mainstream" release, per se, but the index gives some insight into how homebuilders are feeling about the economy and homebuilders are on the frontlines of the housing market. The stronger the report, the worse it should be for mortgage rates going forward.

The same goes for Tuesday's Housing Starts and Building Permits numbers.

Also on Tuesday, the government releases the Producer Price Index. The Producer Price Index is like a "cost of living" report for U.S. businesses -- it measures the change in operating cost from mont-to-month and from year-to-year.

PPI is viewed as a precursor to inflation and inflation is bad for mortgage rates. Therefore, if the Producer Price Index reads higher-than-expected, mortgage rates will rise. If PPI is in-line, rates in Wisconsin should hold steady.

Then, on Wednesday, the Consumer Price Index is released. Again, if costs are rising, mortgage rates will likely follow.

The week closes with the release of the Federal Reserve's minutes from its last meeting in April and the jobs figures.  All in all, a busy week of data and mortgage rates could change by a lot.

If you're still shopping for the market bottom, luck's been on your side but there's a point when it's best to just lock in.  This week may be that point.

Talk to your loan officer about today's market and make yourself a game plan for locking a rate. Rates have never stayed this low, for this long, and this week doesn't figure to be much different.

What's Ahead For Mortgage Rates This Week : January 19, 2010

Mortgage markets showed little conviction last week, carving out just a narrow trading channel. There was very little data on which for markets to move, leaving mortgage rates momentum-bound.

Luckily for rate shoppers, mortgage rate momentum was favorable. Rates were slightly lower Monday through Thursday before breaking downward Friday afternoon. Home shoppers this past weekend caught a nice break.

Last week marked the second straight week in which mortgage rates fell.

This week, in holiday-shortened trading and with little economic data set for release, expect mortgage rates to again move on momentum. The biggest report of the week is Wednesday's Producer Price Index.

Producer Price Index is important to mortgage rates because of its role in inflation.  PPI is akin to a Cost of Living-type measurement, but for business.  As business costs rise, the thought goes, it's not long before consumer costs rise, too. Businesses eventually pass on costs, after all.

In this manner, a rising Producer Price Index can foreshadow rising consumer prices, and, therefore, inflation.

Inflation is awful for mortgage rates.

PPI expectations have revised downward this month, especially because last week's data showed a deceleration in consumer prices nationwide. If PPI isn't as weak as expected, mortgage rates will rise.

Other influential data this week includes Housing Starts, Consumer Confidence and Initial Jobless Claims.

So far, 2010 has been for mortgage rates in Wisconsin and around the country. If you're in need of a rate lock, this week may be a good time to take one.