Mortgage markets improved last week as Wall Street managed news on both sides of the economic coin. There were several instances of higher-than-expected inflation — an event that tends to lead rates higher — but weak domestic jobs data and a soft manufacturing report suppressed the damage.
Rates were also held low by ongoing issues in Greece.
In Greece, the government is currently struggling to meet its debt obligations — despite a restructuring of existing debt negotiated in 2010.
Without a plan for its new debt, though, Greece will likely to default on what it owes. Eurozone and international banking leaders have failed to reach consensus on the situation, and now the citizens of Greece are in a state of social unrest.
The uncertainly surrounding the nation-state spurred a bond market flight-to-quality last week. That, too, helped to keep rates low.
Last week, mortgage rates fell for the sixth week out of nine, a streak that’s dropped conforming mortgage rates to their lowest levels of the year.
This week, that could change.
Wednesday, the Federal Open Market Committee adjourns from a 2-day meeting and anytime the Fed meets, there’s a good chance that mortgage rates will move. The FOMC makes the nation’s monetary policy.
The meeting adjourns at 12:30 PM ET and Fed Chairman Ben Bernanke will follow with a press conference at 2:15 PM ET. The press conference is meant to give context to the FOMC’s decision, and allow for back-and-forth with the press corps. Wall Street will watch closely, too, for signals of the Fed’s next action(s).
In addition, this week will see the results of May’s Existing Home Sales report and New Home Sales report. Both are considered important to the housing market, and to the economy overall.
If you’re still floating a mortgage rate, falling mortgage rates have helped you. There’s not much room for rates to fall further, however. Consider calling your loan officer and locking something in.