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Looking Back And Looking Ahead : August 11, 2008


In a week packed with mortgage news and economic data, mortgage rates swung hard in both directions last week before settling into the weekend slightly higher across the board.

Adjustable-rate mortgages worsened more than their fixed-rate counterparts and both broke a two-week streak in which mortgage rates had improved.

But, if we look at all of the big stories of last week, there was a dramatic overweight of news that is usually “good for rates”.

Those stories included:

In the end, it turned out that the news was so good, investors decided to jump back into the stock market, propelling the Dow Jones 3.6 percent to a 6-week high. This fevered trading action drew investor money away from the bond market — including bonds of the mortgage-backed variety — and that pressured mortgage rates higher.

And, of course, it didn’t help rates when the two biggest insurers of mortgage-backed debt posted large quarterly losses and warned of more delinquencies ahead.

Turning our attention to this week, make note that it is back-heavy on data. Therefore, expect the positive momentum of Thursday and Friday to carry through Monday and possibly Tuesday.

Mortgage rates now move more in a hour than they used to in a dayBy Wednesday, however all bets are off — that’s when July’s Retail Sales data is released. Furthermore, Retail Sales is backed up Thursday by the Consumer Price Index, a Cost of Living measurement.

Both data points are correlated with inflation so higher-than-expected readings may cause mortgage rates to rise.

Regardless, given that mortgage rates are now moving more in a hour than they used to in a day, be prepared to get your mortgage rate quotes quickly and be ready to act on them.

Just 90 minutes later, the quote could be expired.

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