Florida mortgage markets reacted negatively to weaker than anticipated housing data and employment data last week – as mortgage rates rose overall toward Friday.
This increase continues a slightly upward trend for mortgage rates as it was the third time in 4 weeks that mortgage rates increased. Mortgage rate shoppers really took a hit on Thursday and Friday of last week, as rates then were especially volatile.
Traders Exit Early as Mortgage Rates Rise
As was expected, the Memorial Day holiday had traders punching out early to take full advantage of the 3-day weekend. As this happened, rate swings grew wider and wider.
Last Wednesday morning marked the low point for mortgage rates, and by Friday, some mortgage rates were higher by as much as 3/8 percent.
This week, with traders coming back to work, the pace of change should slow a bit, if not for the volume of closely-watched data expected to be released.
Economic Data to Watch This Week
Mortgage rates this week will hinge largely on expected economic data related to the housing market. Three key reports will be released, with each one expected to reconfirm that the housing market, though weak, is not as anemic as it used to be. Reports to be released this week include:
- Tuesday: The Case-Shiller Price Index
- Wednesday: The Existing Home Sales Report
- Thursday: The New Home Sales Report
Caution: Local Markets Rarely Perform in Lock Step with National Trends
I’ve said here before that caution is warranted as Florida real estate sellers attempt to tie national trends and news to local home prices. Real estate is a hyper-local business, so it pays to stay up to speed on what’s happening in your own backyard.
Though the national numbers released this week may show overall improvement, and it’s important to not read into them too much. They’re good for an overview but shouldn’t be used as the basis for an offering price.
In addition, there will be two consumer confidence surveys released — one on Tuesday and one on Friday.
This Week’s Consumer Confidence Reports May Prove the Best Barometers
Here in Florida and across the nation, consumer surveys continue to serve as the best indicators of how the economy is performing. As consumer confidence rises, so does consumer spending. As consumer spending represents two-thirds of the U.S. economic engine, you can easily see the reason for my focus on it.
If confidence is rising, expect the stock market to benefit and the mortgage bond market to suffer. Why? Because when consumers feel good about the economy, they pull their money from bonds (including mortgage bonds) and put it into more risky investments (stocks). This practice tends to lead mortgage rates higher.
This Week’s Outlook: Locking
It’s not very likely that mortgage markets will be as volatile this week as they were last, but that doesn’t mean that they won’t change. There’s a good bit of data crossing the wires over the next 4 days, so it’s likely that Friday’s rates will be different from today’s.
That said, if you’ve found a rate and payment you’re comfortable with, consider locking it in. It’s unlikely to last long.
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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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