Last week ended with upward pressure beginning to mount on mortgage rates. Economic news was mixed, but hinted that perhaps the downturn will not be as bad, or as long, as many had feared. Both Retail Sales and Industrial Production posted only small gains, but both faired better than expected. Both the Producer and Consumer Prices Indices revealed that inflation is still marching ahead with little sign of abating any time soon. All of this makes the likelihood of a rate cut from the Fed less likely, and many interest rates began to trend upward with these reduced expectations.
We could see mortgage rates holding fairly steady this week as the market prepares for next week's Fed meeting. There are not any major market-moving economic reports due. However, we will get some insight into the housing market with both new and existing home sales data due. Any signs of recovery in the housing market could be met with upward pressure on mortgage rates. If housing data plummets, we may see some downward pressure in hopes of more help from the Fed.
Paul Cantor is a mortgage planner in central Virginia. He may be reached at (804) 433-1510 or at www.PaulCantor.com .
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