On this day in 1986 one of the greatest movies of all time was released. Does anyone know which movie? Anyone? Anyone? (see movie reference HERE).
Last week US stocks rallied and home loan rates moved which direction? Anyone? Anyone? They increased modestly.
The Week Ahead
The calendar is full of significant events this week. There won’t be anytime to take a day off (had to sneak in another movie reference).
The US Treasury has auctioned $32 billion of 3-year and $22 billion of 10-year notes already this morning. Tomorrow they will auction an additional $14 billion of 30-year bonds. The added supply of fresh debt will make it hard for home loan rates to improve this week.
On Tuesday and Wednesday we’ll get fresh readings on the Consumer Price Index and Producer Price Index. Inflation has been trending higher and remains the primary driver of long-term interest rates including for mortgages.
The Federal Open Market Committee meets Tuesday-Wednesday and is expected to announce a +.25% hike to the Federal Funds Rate mid-week. The Fed does not directly control mortgage rates but their comments and actions can influence them. If you have not locked in a rate don’t fret. The .25% rate hike is already baked into the rates you see today.
Technical trading patterns
Momentum is not on our side. Rates worsened modestly last week and have more room to worsen this week. I think we have more to lose than to gain so will maintain a locking outlook.
Current Outlook: locking