Low volume and less than optimum conviction levels last week had Friday’s post-holiday action moving slower than a first year college student on Sunday morning.
Luckily, mortgage rates held steady after their previous two week back to back plummet. I say luckily because steady beats rising any day of the week.
Actually, I was a bit surprised to see that mortgage rates didn’t’ begin to climb on Friday in light of several key and one “major” negative economic news items that came through the wire:
- Joblessness rates continue to increase
- Consumer spending (read confidence) faltered
- The U.S. dollar’s weakness can be likened to that of a limp dish rag
Historically, these elements have all played a role in mortgage rate movement. However, it’s the last bullet point — the weakened dollar — that seems most intriguing.
See, normally, a strong dollar tends to push mortgage rates downward, while a weak dollar typically causes mortgage rates to rise. Maybe we’re just in the eye of the storm so to speak – as the dollar’s most recent thrashing came as swiftly as a Bruce Lee punch combination. As such, it wouldn’t be much of a shock to see mortgage rates spike a bit in the coming days.
The US Dollar Took a Recent Bruce Lee Beat- down... So Why didn't Mortgage Rates Rise?
We’re up for another “week interrupted” through Sunday, aside from a couple of economic reports. “Uncle Ben” should remain quiet as well, and I don’t think we’ll see too much in the way of trader activity. As such, volume should be very light. But stay tuned… Low volume can sometimes signify the calm before a storm of high volatility. If anything, traders will seek to shake some holiday rust off and get back into the swing of things!
The silver lining to all of this continues to be that mortgage rates are still hovering near their 2008-lows. However, Florida real estate investors and home buyers need to act quickly. Given the path of the dollar and low-volume trading, things could all change in a flash.
(Dollar Value Chart Image courtesy: The Wall Street Journal)
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Kevin Sandridge
The Florida Home Loan Specialist
Signature Home Funding
410 Laurel Cove Way
Winter Haven, FL 33884 |
Mobile: 863-604-3019
Fax: 888-496-0265
kevin.s@sigfunding.com
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I hope you found this post useful! As always, if you or anyone you know is in need of a local Florida mortgage loan originator, I’m your guy. Call me at 888-859-7418 or apply online for your Florida mortgage. We’ll keep you posted and let you know when it’s time to pull the trigger!
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