Mortgage rates have been trending higher over the past few weeks (they are still very low). Here are some of the scheduled economic indicators that may impact mortgage rates this week:
- Wednesday, August 22: Existing Home Sales and FOMC Minutes
- Thursday, August 23: Initial Jobless Claims and New Home Sales
- Friday, August 24: Durable Good Orders
As I write this post (9:00 am PST) the DOW is at a 4.5 year high (13,260). Remember that as the stock markets improve, you will see investors trade the safety of bonds (like mortgage backed securities) for the possibility of higher returns of stocks. This will cause mortgage rates to trend higher as will signs of inflation or that the economy is improving.
Clients often ask me if the government controls mortgage rates and are surprised to learn they do not. The government has been involved with buying mortgage backed securities which is manipulating mortgage rates to lower levels however, they do not directly set mortgage rates. The Fed does set the Fed Funds Rate, which impacts the rates for HELOCs but not mortgage rates.
Mortgage rates often change throughout the day. Last week, there were days where one of the lenders I work with issued three to five changes in just one day.