Current Mortgage Rate Weekly Outlook

While Treasury Bond auctions were a driver for mortgage rates last week, the current mortgage rate weekly outlook shifts to Tuesday and Wednesday’s scheduled Fed Meeting and to Friday’s monthly Jobs report. The Federal Open Market Committee is meeting today and tomorrow and as always everyone in the mortgage industry will not only be listening to ‘what’ the Fed says but ‘how’ they say it. As the overall economy begins to show initial signs of recovery and the Fed’s yearlong propping up of the mortgage market begins to wind down, interpretation of the Fed’s comments become a real passion for all those folks looking to foretell the future of mortgage interest rates. Similarly, with National Unemployment figures flirting with the 10% mark, Friday’s Job report will either help or hinder the budding recovery. If more jobs than expected are created it will be further evidence that the economy is on the mend but if unemployment numbers continue to soften it will be hard for a recovery to gain any real traction.

Mortgage interest rate in 2009

As we have discussed here many times, mortgage interest rates in 2009 have been kept low due to a massive commitment by the Fed to buying Mortgage Backed Securities. This buying program was initially scheduled to end 12/31/2009 it has been extended until the end of March 2010. The total commitment of $1.25 Trillion has kept rates low for this entire year and just like the Federal Housing Tax Credit for First Time Home Buyers, there is speculation that the buying program will be continued after the 1st Quarter of 2010 but the mortgage market must be prepared for the event that it is not. Real market forces will come into play once the Fed (who has bought 80% of the MBSs sold this year) ends its program. This will almost certainly lead to higher mortgage interest rates. How much higher is the question.

Current mortgage rates and unemployment correlation

The Unemployment numbers due Friday will go a long way in indicating whether or not the economy is really on the mend. It will be difficult for any recovery to fully develop without real jobs growth. Most experts still believe that unemployment will continue to get worse in the near term. Any good news on the jobs front will likely be bad news for current mortgage rates as it truly will be a signal (or will be interpreted as a signal) of improving economic conditions on the whole. At some point as the economy improves the Fed will have to begin to increase the short term rates that they control (Fed Funds rate) that are the drivers for so many other rate indexes. This is often the first and most important step in combating inflationary fears that will develop if rates stay low as the economy rebounds.

Mortgage Interest Rate Outlook next 60 days

What does all this mean to the average consumer? First and foremost it should mean that the mortgage consumer needs to pay attention in coming weeks and months. To get an accurate depiction of the mortgage interest rate weekly outlook, they will need to pay attention to things other than just current mortgage rates but also to unemployment numbers, Fed announcements and to news from Congress about the First-time Home Buyer Tax Credit and the extension or expiration of other programs beneficial to them. With a little bit of diligence and a sense of timing, even the leeriest mortgage customer will be able to take advantage of what still are unbelievably low current mortgage rates historically. Contact one of our mortgage experts today to examine your options.

If you have any question that you would like to get answered by our expert mortgage brokers, please email us or call us at 1-877-868-2503. See our Current Mortgage Rates.