Last week marked the 3rd consecutive week through which conforming mortgage rates dropped, the longest such streak since February.
Mortgage rates in Voorhees are now scraping their lowest levels of the year.
A few interesting stories developed last week.
First, the Federal Open Market Committee met and voted to hold the Fed Funds Rate within its target range of 0.000-0.250. In its post-meeting press release, the FOMC said that inflation has been “pushed up” in recent months, but that believes, long-term, that inflation will moderate.
This message pleased the inflation-sensitive bond markets, the place where mortgage rates are made. Bond prices rose in response, and mortgage rates fell.
Then, because markets believe Greece can’t meet its current debt obligations without restructure, a bout of safe haven buying began, benefiting domestic mortgage-backed bonds and, therefore, mortgage rates.
It’s a terrific example of how world events can change mortgage rates for buyers and would-be refinancing households across New Jersey.
This week, mortgage rates will take their cues from the Greece story as it continues to develop, and from Friday’s Non-Farm Payrolls report. The jobs report is always a potential market-mover.
Economists expect to see 196,000 jobs added in the economy for April. If the actual number is larger-than-expected, look for mortgage rates to rise on better prospects for the U.S. economy. If the number falls short, look for rates to drop.
With last month’s mortgage rate rally, this week marks a good time to lock a rate. Based on current market fundamentals, it appears that there’s much more room for rates to rise than to fall. This may be as low as rates get all year.