Mortgage rates last week for California home owners and home buyers proved to be another volatile week. Wall Street alternately sought risk and shunned it, causing mortgage-backed bonds to rise and fall rapidly.
There was a lot to move markets, too, including banking concerns across Europe, inflation figures within the U.S., and a public speech by Fed Chairman Ben Bernanke.
Conforming interest rates in California rose to their highest levels of the week Wednesday afternoon, then receded into the weekend. 30-year fixed rates remain above their all-time lows set 2 weeks ago. 5-year ARMs are at all-time lows.
This week, mortgage rates figure to be equally jumpy due to a lot of economic data coming out, Labor Day, and bond markets expected to be light in trading volume. When volume is light, pricing gets volatile.
The week’s calendar of data includes:
- Monday : Pending Home Sales Index; Personal Income and Outlays
- Tuesday : FOMC Minutes; Fed President Kocherlakota speaks
- Wednesday : Factory Orders
- Thursday : Jobless Claims; ISM Manufacturing Index
- Friday : Non-Farm Payrolls
Of all the reports, though, it’s Friday’s Non-Farm Payrolls that might move mortgage markets the most.
Jobs are crucial to the ongoing economic recovery and, from Wall Street to Capitol Hill, it’s top of mind.
If the jobs report shows more jobs created than expected, or a positive forward trend, expect bond markets to fall, pushing mortgage rates up. On the other hand, if the jobs report is soft, mortgage rates may improve.
We can’t know what rates will do on any given day, so the best strategy is to watch the markets closely and be ready to push the rate lock button….if you can.