Mortgage markets improved in a holiday-shortened week last week, drawing mortgage rates lower nationwide.
Few new economic releases reached the markets, but those that did suggested recovery — especially with respect to housing and employment, two key drivers of the U.S. economy overall.
Mortgage rates tend to rise when on strong data. That’s not what happened last week, however.
First, in housing, the New Home Sales and Existing Home Sales reports each showed strength for December and January. Separate reports show that sales volume is rising nationwide even as the number of available homes for sale fall.
Home Supply is reaching bull market levels, which pressures home prices higher.
And then, in employment, the government’s Initial Jobless Claims report turned up good news, too. The report’s 4-week moving average is now down to its lowest level since 2008, a figure that suggests that U.S. households are getting back to work and staying there.
As rate shoppers , don’t expect rates to fall forever.
Last week’s rate improvements were partly because the Greece bailout has yet to be finalized, and partly because concerns about Iran have sparked a mortgage bond flight-to-safety. International demand for U.S.-auctioned bonds was especially high last week and mortgage bonds benefited.
As the situations in Greece and Iran stabilize, therefore, all things equal, mortgage rates should rise.
There are just two key data points set for release this week — the Pending Home Sales Index (Monday) and Personal Income and Outlays (Thursday) — plus two key European votes on the Greece bailout. The Case-Shiller Index will also be released and the FHA is expected to announce new mortgage insurance premiums.
Mortgage rates remain near all-time lows. If you’re still floating a rate, or waiting to refinance, consider moving up your timeframe. It’s a good time to lock your mortgage rate for the long-term.