What's Ahead For Mortgage Rates This Week: June 15th
The mortgage market roller coaster continues. Markets worsened badly in the early part of last week, before rallying into Friday's close.
Overall, mortgage rates were slightly higher for the week even though -- briefly -- they rose to levels not seen since November 2008.
Last week marks the third week in a row and the sixth out of the last seven that mortgage rates increased.
It's not all bad news for mortgage rate shoppers, however. The market's surge higher appears to be slowing and its momentum may start to reverse.
See, mortgage rates don't come from thin air. They're based on the price of mortgage-backed bonds and, over the last few weeks, it seems as if nobody on Wall Street wanted anything to do with them. A massive sell-off that caused bond prices to plummet and mortgage rates to soar.
Freddie Mac says rates are up 3/4 percent in the last 3 weeks but loan officers will tell you that's undercutting it. Conforming mortgage rates are up more than 1 percent since Memorial Day.
The biggest reason for the sell-off was that markets feared a runaway inflation scenario. The U.S. Treasury has assumed an unprecedented debt load this year and to repay it, markets expect the government to print more cash -- an inflation-inducing scenario.
However, when a number of high-profile investors and a country said last week that their faith in the U.S. economy remains strong, markets viewed it as an endorsement of government-issued debt. It served as Thursday and Friday's rate-dropping catalyst.
This week, mortgage rates will move on three points:
- Data, including key inflation and housing reports
- Rhetoric, including 5 Federal Reserve member speeches
- Momentum, including technical trading patterns
Therefore, if you're shopping for a rate and find one that fits your budget, consider locking in right away. With rates changing every few hours, it's likely that if you wait too long, the rate will be gone.
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