Mortgage Markets In Review : January 5, 2008

Like the rest of the country, mortgage markets were on semi-vacation last week. The low trading volume led to wild rate swings.

After beginning the week vastly improved, and capped by a terrible late-Friday run, mortgage rates ended the week unchanged for the second week in a row.

This week, though, it’s anyone’s guess. Wall Street comes back to work in force and, in the time since they’ve left, there’s been a lot going on:

* Holiday sales were even slower than expected
* Consumer confidence touched an all-time low
* Gas prices spiked nationally — by as much as 40 cents in some areas

Ironically, Wall Street will likely position the bad news as good for the stock market. This is because negative economic data pressures Congress to pass larger, more sweeping mortgage rates history| Unemployment ratestimulus in 2009. However, what’s good for stocks is often bad for bonds and that’s the market from which mortgage rates are derived.

In fact, it was an exceptionally weak data point Friday that helped start the January 2 stock market rally that, consequently, caused mortgage rates to bulge.

This week, there’s only one high-profile data point to watch — Friday’s jobs report. Economists are predicting the another 475,000 Americans lost their jobs in December and that the Unemployment Rate reached 7.0 percent.

If the actual numbers are in-line or worse than the predictions, mortgage rates could rise on the same “More Stimulus” line of thinking.

If the jobs data shows strength, however, don’t expect that rates will fall. For now, markets are in a defensive stance about the economy and tends to work against rate shoppers and home buyers.

(Image courtesy: The Wall Street Journal Online)

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  1. That is actually not true. The vast majority of folks have sufficient equity in their home to refinance. At my company–which does loans in all 50 states, we only have to turn down about 1 in 8 folks for insufficient equity. Remember–the media is not your friend. They sensationalize reality in order to sell more papers! Talking to a knowledgable professional is the best way to understand what is truly going on in your marketplace!

  2. Caitlyn Howells on

    I’d love to refinance my home right now as I am on a locked in rate that is much higher than current rates. The only problem is my penalty on my current mortgage runs to thousands of $$ which means I can’t actually afford to refinance. I’m pretty sure there are others in the same position.

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