Current mortgage rates appear poised to open the day today better than yesterday and meaningfully better than the beginning of the week. Despite avoidance of a disorderly default in Greece, market analysts have determined that the bailout deal does not fundamentally alter the risk environment in Europe. Additionally, with very little economic data in the US this week, US markets have focused on the sharp increases in gas prices and the potential negative impact that may have on our economy in the future. For the consumer needing a mortgage for a refinance or purchase transaction, this creates an opportunity to lock rates near all-time lows. This opportunity may not last much longer.
Today two economic reports are due to be released in the US. At 9:55 AM, the monthly consumer sentiment report is expected to show improvement after dipping slightly last month. Then at 10 AM the monthly new home sales figures for the past month will be announced. Expectations are for further improvement here as well. If both reports come in as expected then mortgage rates are likely to have difficulty improving today.
Next week presents several risks for consumers needing a mortgage. The week is chocked full of US economic data that very likely will show strengthening throughout the economy. The most important reports next week include Tuesday’s durable goods orders and Thursday’s weekly jobless claims, Core Personal Consumption and Expenditures and Institute of Supply Management (ISM-manufacturing). However, other influential reports include consumer confidence on Tuesday, Chicago Purchase Manager’s Index (manufacturing in the Chicago Fed region) and the Fed’s Beige Book (regional economic activity) on Wednesday and Thursday’s construction spending figures. Should the data continue to show growth in the US economy, mortgage rates could find themselves under severe upward pressure.
The counter-balance to all this good economic news however is the early rise in gas prices. Barring any announcement by Saudi Arabia of increased crude supplies or calming of tensions between Iran and Israel, gasoline prices are likely to continue moving higher. This will provide a check on mortgage rates.
Have a great weekend!
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