Mortgage markets had a terrible, holiday-shortened week last week as Wall Street responded to worse-than-expected inflation data and action from the Federal Reserve. Mortgage bonds sold off with force, causing mortgage rates to rise for the second week in a row.Last week was a bad week to float a mortgage, to say the least.
Rates rose by the largest margin in any week since late-2009.
The two biggest stories from last week both came from the Federal Reserve. The first was the release of the FOMC January meeting minutes which showed more confidence in the U.S. economy than Wall Street expected, and the second was the Fed's surprise announcement to raise the nation's Discount Rate to 0.75%. Both sparked risk-taking on Wall Street and bonds sold-off as a result.
Now, the Fed Funds Rate won't climb anytime soon and neither will Prime Rate, but the Fed has sent a clear message to the markets -- The Era of Loose Monetary Policy is over.
This week, there's a lot of economic data set for release.
- Tuesday : Case-Shiller Home Price Index, Consumer Confidence
- Wednesday : New Home Sales
- Thursday : FHFA Home Price Index, Initial Jobless Claims
- Friday : Existing Home Sales, Personal Consumption Expenditures
After last week's performance, conforming mortgage rates have now unwound most their January gains. If you're waiting for the right time to lock, it may have been 2 weeks ago.
Consider locking in this week to protect against any further deterioration in price.