Mortgage rates have effectively been unchanged for two weeks now.
What may throw interest rates off the sideways path? The economic calendar is busy this week. Tomorrow we’ll get the latest reading on Retail Sales which has been surprisingly week the past two releases given that gasoline prices are so low.
The highlights this week will be delivered Tuesday and Friday when we get the Producer Price Index (PPI) and the Consumer Price Index (CPI). If you’ll remember back to the Fed’s last monetary policy statement one of the factors they made clear was they would not raise interest rates until inflation moved back towards the 2.00% level.
Inflation has always been one of the primary drivers of interest rates (CLICK HERE to learn why). Inflation has been at historically low levels for a few years. Until inflation shows signs of ticking higher mortgage rates should remain relatively low. If we see an uptick in annualized inflation this week it would hurt rates.
Also on the calendar this week is the home builders’ housing market index (Wednesday), housing starts (Thursday), building permits (Thursday), and consumer sentiment (Friday).
After two weeks of relative calm the markets may get choppy this week.
Current Outlook: neutral