Mortgage Updates

Mortgage rates this week were driven by the world events which overshadowed domestic news. The violence in the Middle East and the incredible disaster in Japan moved mortgage rates a little lower. Incredibly the US economic data  which had strengthened  had a minuscule impact. 

The present environment is rare for that reason unrelated events in around the world are exerting this type influence on US mortgage rates. While global economic growth rates will always be a significant factor, they typically shift at a gradual pace. The disaster in Japan is so unusual in that it produced an extremely abrupt decline in Japan's economic outlook.

Slower economic growth in Japan will probably bring about slower growth in the US.Which is not good for our economy, but which can be favorable for mortgage rates. The current and potentially future uncertainty in the Middle East can also be favorable for mortgage rates, since it leads to higher oil prices which bring about slower economic growth. Rates were pushed in both directions this week due to changing conditions in the Middle East. The factors seen were increasing violence in Bahrain, then the prospects of diminishing violence in Libya.

This was a week with a packed economic calendar along with a Fed meeting and all were pushed to the background through the news from over seas. World events affected our rates more than local events this week. 

Otherwise, the generally stronger than expected economic data might have caused mortgage rates to move higher.

Rising food and energy prices produced greater than expected inflation readings in February.

Core CPI inflation, which excludes food and energy, rose just 1.1% from one year ago, but it has been moving higher in recent months.

The Fed statement contained no surprises and produced little reaction.

To summarize, this last week it was world news front and center that influenced our rates to your advantage.  Unfortunately, there will be again be times when world events will cause rates to not just rise but spike.  Those are the days that make nightmares for lenders and buyers alike.

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