Economic Reports, Market Insight, Mortgage Rates

The Week Ahead for Mortgage Rates: April 9, 2012

April 9, 2012 by · Leave a Comment 

Spain mortgage ratesIn a week of up-and-down trading, mortgage markets improved for the second consecutive week last week. Weaker-than-expected jobs data plus evidence of a slumping Eurozone took mortgage bonds lower, capped by a furious Friday morning rally that dropped mortgage rates to near-record levels.

Once again, volatility ruled the mortgage bond pits.

Tuesday afternoon, after the release of the Fed March Minutes, mortgage rates spiked. Some products climbed as much as 0.250 percent. The surge stemmed from the Fed Minutes showing Federal Reserve members hesitant to begin new rounds of market stimulus without a demonstrated, national economic slowdown. 

Click here to see today’s mortgage rates.

Wall Street hadn’t expected the Fed’s verbiage to be so well-defined. With little evidence that such a slowdown was underway — the economy has shown two straight seasons of consistent, steady growth, after all — equity markets rallied and bond markets sunk, causing mortgage rates to rise.

By Wednesday, however, mortgage rates had started to fall. 

Civil unrest in Spain plus concern that the nation will fail to meet its debt obligations drew global investors away from equities and into the relative safety of U.S. government-backed bonds — including mortgage-backed bonds. This is a common investment pattern during times of economic uncertainty and one of the major reasons why mortgage rates have been so low, for so long.

If the scenario in Spain sounds similar to what transpired in Greece between mid-2010 and late-2011, that’s because it is. Mortgage rates in Northwest Indiana and suburbs of Chicago Illinois may benefit short-term.

Click here to see today’s mortgage rates.

Also helping rates last week was the March jobs report or lack thereof.

The U.S. government reported 120,000 net new jobs created in March, well short of the 200,000 figure that analysts expected. The stock market sold off sharply on the news, giving mortgage rate shoppers another chance to capture low rates.

This week, with the economic calendar light, look for Europe to dictate market action. Mortgage rates may move lower but there’s more room for rates to rise than to fall. Mortgage rates remain near all-time lows.

This is The Week Ahead for Mortgage Rates: April 9, 2012.

Click here to see today’s mortgage rates.

Quick general rule of thumb when keeping an eye on mortgage rates.

Strong Economic News: $$$ from Bonds —> Stocks = Home Loan Rates Go Up

Weak Economic News: $$$ from Stocks —> Bonds = Home Loan Rates Go Down

If you or someone you know is thinking about buying a home, the combination of low home loan rates and affordable home prices make this an ideal time to buy a home. Want to know if you can afford a new home? Call or text me at 512-522-7284 to discuss your personal situation and your home loan options!

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James K Barath, CMPS®

James K Barath is a Certified Mortgage Planning Specialist®, Certified FICO® Professional, Certified Military Housing Specialist® and your FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation's PMA Science of Success Class. It's your home and your future. It's his profession and his passion. He is ready to work for your best interest. Contact James for your FREE Home Loan Approval !  His Motto: I Facilitate the American Dream Through Responsible Mortgage Lending and Financial Literacy!

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