This week is packed full of economic indicators that may influence mortgage interest rates, including the Fed meeting on Wednesday and Jobs Report on Friday. The Jobs Report carries a lot of weight with mortgage rates as it may indicate inflation. As the economy and employment improves, we may see signs of wage inflation. Inflation is the arch enemy of bonds, like mortgage backed securities – which mortgage rates are based on. World tensions may also impact mortgage rates as investors may seek the safety found in bonds.
Mortgage rates are based on mortgage backed securities (bonds) and often change throughout the day. Since they are based on bonds, mortgage rates will often improve when the stock markets are deteriorating as investors will trade the safety of bonds for the potential greater return found with stocks. The reverse is also true. World events as well as scheduled economic indicators may impact the direction of mortgage interest rates. Watch for signs of inflation, which erodes the value of bonds and therefore, causes mortgage rates to trend higher.
Happy Cinco de Mayo! This week’s calendar is very light, especially when you compare it to the amount of economic data that was released last week. It’s not just economic reports that may move mortgage rates. The stock markets or world events, such as what’s going on with Russia, may impact the direction of mortgage rates. Here are the economic indicators scheduled to be released this week:
This week is jam packed with data that may impact the direction of mortgage interest rates. Mortgage rates are based on bonds (mortgage backed securities) and are traded similar to stocks. Often times, mortgage rates will improve when we see the stock market taking a hit or rise when the stock market is rallying. This is because investors will trade the safety of bonds for the greater returns potentially found with stocks. The reverse is also true.
Mortgage rates are based on bonds (mortgage backed securities) and often fluctuate throughout the day depending on activity in the markets. Often times when the stock market is taking a hit, we’ll see mortgage rates improve as investors will trade seek the safety of bonds. World events, like what is taking place in Crimea, may impact mortgage rates, as will the Fed’s bond buying program and economic data that is scheduled to be released. Here are some of the economic indicators scheduled to be released this week:
Mortgage rates are slightly improved this morning as the stock market is taking a bit of a hit. As I write this (8:45 am) the DOW is down about 200 points. It’s not unusual to see mortgage rates improve when the stock markets are selling off as investors will seek the safety of bonds. Mortgage rates are based on bonds (mortgage backed securities) and will often react opposite to the stock market.
SEA – HAWKS!!! SEA – HAWKS!!! Yes, I’m still very excited and thrilled over our team’s incredible Super Bowl win. Although trouncing the Denver Bronco’s in the big game won’t impact mortgage interest rates, it certainly influences the mood here in Seattle and for all Seattle Seahawk fans. We did it!!