Mortgage rates improved in spite of quite a bit of good economic news last week. FHA mortgage rates continued a three-week trend towards lower rates.
Any or all of these three things should have pushed rates higher:
- The Federal Reserve said the economy continues to strengthen
- Consumer Confidence pushed to a 2-year high
- 4th Quarter domestic output exceeded Wall Street’s expectations
What kept rates down was a report from Standard & Poor’s that said U.K. banks are no longer counted among the world’s most stable. This triggered investors to move money into the US Dollar and helped prop up the mortgage bond market.
This week is loaded with data as well. Monday is inflation day. Wednesday is the ADP Challenger Report, and Friday is the government’s Non-Farm Payroll data.
The biggest predictor of FHA interest rates this week will be Friday’s report. If the jobs data is better than expected, rates will jump. If the report reveals weakness, rates might inch lower.
We stand a much greater chance of seeing higher rather than lower rates at the end of the week.
Tags: ADP Challenger Report, Non-Farm Payrolls, UK Banks