Rate Watch
After a peculiar 2 week drop in mortgage rates, it appears reality is beginning to set in. On Thursday, Freddie Mac released its weekly Primary Mortgage Market survey. The survey showed a second consecutive decline in mortgage rates. Rates on the benchmark 30-year fixed rate mortgage averaged 6.24 percent, a decline from the previous week's 6.26 percent. The decline has stricken many experts as odd. As mortgage rates were falling, US Treasuries had been on the rise. Mortgage rates and Treasuries typically move in lock step. But as Freddie Mac was releasing its survey, rates were already on there way up. A rate hike by the European Central Bank (their version of the Fed) caused the mortgage market to adjust their prices to keep investors from taking their money overseas. Bankrate.com's overnight average has moved from last week's 5.78 percent to 5.81 percent and the benchmark 10-year Treasury is at its highest levels since June of 2004. We can expect next week's Freddie survey to reflect higher interest rates.
In other programs, rates on 15-year mortgages remained at 5.89 percent, Freddie Mac said, while one-year ARM's rose to average 5.34 percent from the previous week's 5.32 percent.
This week, the biggest release on the economic calendar is the belated Employment Report for February. The Bureau of Labor Statistics fell a little behind last week, and needed an extra week to gather together all their data. So what we should have known last Friday will be know this Friday. The Employment provides us with the number of new jobs created and the Unemployment Rate and it is one of the most important reports of the month. The health of the labor market is arguably the single biggest indicator of an economy's performance.
Besides the Pending Home Sales and Mortgage Applications reports, which might be of interest to Real Estate pros, there is little else on the US economic calendar that will affect mortgage rates. Both the Productivity and Trade Balance reports are more relevant of long-term changes, and won’t affect the short-term movement in rates.
posted by Vincent Biondillo @ 8:46 AM
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