Mortgage rates started last week at two-year highs, and began moving higher. However, the week ended with rates pulling back, erasing part of the gain. The market appeared to be continuing to price in the likelihood of the Fed beginning to taper economic supports at its next meeting in mid-September. The minutes from the last Fed meeting, released last week, supplied no real additional insights into the probability of tapering beginning at the next meeting. Existing Home Sales shot much higher than expected last month, but a dismal New Home Sales report on Friday appears to have been the catalyst for pulling mortgage rates back downward as the week ended.
Rates should start the week fairly flat, but could easily be nudged either way. Consumer moods have dampened as of late, and a larger-than-expected decrease in Consumer Confidence could push rates downward. GDP is also due this week, with an expected adjustment upward. If that adjustment fails to happen, rates could draw back, but an adjustment above 2.3% could help rates spike upward.
(Courtesy of Joe Massey, Castle & Cooke Mortgage)