Mortgage markets improved last week for the second week in a row. And, also for the second week in a row, rates were down on “safe haven” buying — just not for the same safe haven reasons as before.
If you’ll remember, safe haven buying is when investors sense market risk, then move money toward less risky investments.
Well, because the U.S. government backs the bonds of Fannie Mae and Freddie Mac, mortgage bonds tend to fit the “less risky” description and as Iceland’s volcanoes shut down air traffic in Europe, mortgage bonds benefited.
That was early in the week.
Then, on Friday, when the SEC announced fraud charges against Goldman Sachs, a second wave of bond buying began as Wall Street fled the stock market. Mortgage rates fell a second time and the improvement carried through the market’s weekly close.
Conforming and FHA rates are as low as they’ve been since March.
This week, there’s not much data due until Thursday, but even Thursday’s releases won’t make a huge impact on rates.
- Initial Jobless Claims : Important vis-a-vis broader employment figures. A strong number could push rates up.
- Existing Home Sales : Housing remains a key part of the economy. Strong sales are expected because of the tax credit.
- Producer Price Index : A “Cost of Living” index of business. A weak reading is expected because inflation is low.
Then, Friday, New Home Sales is released.
The bigger risk to Tristate home buyers this week than data is the reversal of the safe haven buying patterns that have kept mortgage rates down over the past 10 days. Keep an eye on the markets and your loan officer on speed dial. Markets can — and do — change quickly.
Yael Ishakis is an active loan officer you can reach her at 718-732-0309 or via email yishakis@fmm.com
You’ll want to time your lock accordingly.
