What’s Ahead For Mortgage Rates This Week : May 24, 2010

by Tom Tousignant

in Blog, Mortgages

Existing Home Sales Mar 2009-March 2010Mortgage markets improved again last week on worsening news out of Greece and the Eurozone.  In times of turmoil and uncertainty, global investors are still showing they like the ‘security’ of US Government backed investments, so Treasury Notes, Bonds, and Fannie Mae / Freddie Mac mortgage backed securities are all attracting new cash.  The money flowing into mortgage bonds is causing bond prices to increase and mortgage rates fall as a result.

It’s the 4th straight week in which conforming mortgage rates in North Carolina improved and, against the expectations of experts everywhere, it’s now late-May and mortgage rates are as low as they’ve been all year.

If you’re a homeowner and haven’t looked at refinancing lately, it may be a good time to call a mortgage planner to talk over your options – remember, interest rates are just one factor, but every mortgage plan gets better when rates are lower!

This week, housing and inflation data takes center stage.

  • Monday : Existing Home Sales data – expect a 1 month bump with the tax credit expiration
  • Tuesday : Case-Shiller Index; Home Price Index – prices still soft
  • Wednesday : New Home Sales data
  • Thursday : GDP – Big growth would lead to higher rates.
  • Friday : Personal Consumption Expenditures – big gain would increase rates, but I don’t expect that.

Each of these data points has the power to move mortgage rates — especially because trading volume is expected to thin as the 3-day weekend nears. As volume drops on Wall Street, it will be harder to match buyers and sellers and, as a result, mortgage pricing will get (more) erratic.

There are some signs that mortgage rates are about to reverse trend, so locking this week is probably prudent.

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