Mortgage markets improved last week overall, but barely. After making a sizable move lower through Monday, Tuesday and Wednesday, mortgage pricing jumped Thursday and Friday.Nearly all of the early-week gains were erased.
Conforming mortgage rates in California ended the week slightly improved.
There wasn’t much economic news on which for markets to trade last week. In its absence, bond traders took cues from the currency markets, among other things.
Mortgage rates are closely tied to the value of the U.S. dollar.
This is because mortgage bond investors are repaid in U.S. dollars and, as the dollar gains value, demand for dollar-denominated bonds tend to grow.
More demand for bonds raises prices which, in turn, lowers rates.
Bond prices and bond yields move in opposite directions.
The dollar was strong in the first part of last week, then weakened through Friday’s close with the G-20 meeting looming. Mortgage rates trended along similar lines.
This week, there’s a return to data and mortgage markets should respond — especially because the week is housing-data heavy. Housing is believed to be a key part of the country’s ongoing economic recovery.
- Monday : Existing Home Sales
- Tuesday : Case-Shiller Index, Consumer Confidence, Home Price Index
- Wednesday : New Home Sales
- Thursday : Initial and Continuing Jobless Claims
Once rates reverse higher, they’re unlikely to fall back down