Mortgage markets improved in California last week — but barely — as ongoing doubt surrounding the health of Greece and the Euro pushed additional investors into safe assets, including mortgage bonds.
Mortgage rates were wildly volatile between Monday and Friday before closing the week slightly better than their best levels of the year.
It’s the 3rd straight week in which mortgage rates improved but that doesn’t necessarily mean the trend for lower rates will continue. The last two times mortgage rates teased these levels, they immediately spiked higher.
It happened once in February 2010, and again, 4 weeks later in March.
This week, the same could happen. After a week-and-a-half without much data of consequence, the newswires will be on overtime.
The first release to watch is Monday’s National Association of Home Builder’s Housing Market Index. It’s not a “mainstream” release, per se, but the index gives some insight into how homebuilders are feeling about the economy and homebuilders are on the frontlines of the housing market. The stronger the report, the worse it should be for mortgage rates going forward.
The same goes for Tuesday’s Housing Starts and Building Permits numbers.
Also on Tuesday, the government releases the Producer Price Index. The Producer Price Index is like a “cost of living” report for U.S. businesses — it measures the change in operating cost from mont-to-month and from year-to-year.
PPI is viewed as a precursor to inflation and inflation is bad for mortgage rates. Therefore, if the Producer Price Index reads higher-than-expected, mortgage rates will rise. If PPI is in-line, rates in California should hold steady.
Then, on Wednesday, the Consumer Price Index is released. Again, if costs are rising, mortgage rates will likely follow.
The week closes with the release of the Federal Reserve’s minutes from its last meeting in April and the jobs figures. All in all, a busy week of data and mortgage rates could change by a lot.
If you’re still shopping for the market bottom, luck’s been on your side but there’s a point when it’s best to just lock in. This week may be that point.
Talk to your loan officer about today’s market and make yourself a game plan for locking a rate. Rates have never stayed this low, for this long, and this week doesn’t figure to be much different.