Comments Off on What’s Ahead For Mortgage Rates This Week : March 23, 2009

What’s Ahead For Mortgage Rates This Week : March 23, 2009

2009
03.23

Mortgage rates may rise if the President inspires hope in the financial marketsMortgage markets scored big gains last week, sparked by the Federal Reserve’s pledge to buy $750 billion more mortgage-backed bonds in 2009.

Conforming mortgage rates fell on the week, overall.

But Federal Reserve intervention wasn’t the only good news for rate shoppers last week. New evidence showed — for the time being, at least — that the U.S. economy may be reversing direction:

Should the economy continue trend stronger through the summer, it will likely fuel stock market gains, drawing cash away from mortgage bonds. This would lead mortgage rates higher — perhaps for good.

Today’s levels are artificially low, after all, supported by government intervention more than economic fundamentals. After the Fed’s Wednesday afternoon announcement, rates fell to all-time lows before recovering sharply into the weekend on economic optimism and fears of inflation.

This week, the trend higher may continue.

In addition to the economic data set to be released this week, the U.S. government is expected to unveil its “toxic asset” plan Monday. If the plan includes issuance of new federal debt, inflation concerns will grow and that should lead mortgage rates up once more.

Some of the week’s key events include Monday’s Existing Home Sales report, Wednesday’s New Home Sales report and Friday’s consumer spending report, as well as President Obama’s Tuesday evening address to the nation.

Rates can make huge changes from day-to-day and even from hour-to-hour. If you’re shopping for a new home loan and find a mortgage offer that “fits”, consider locking it right away. With so much news hitting the wires this week, the rate quote is likely to expire quickly.

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