FHA Mortgage Rate Predictions for Week of March 1, 2010

The FHA interest rate improved last week pushed rates to their lowest levels since early February.

The economic data was negative:

• Consumer Confidence posted 16% short of expectations
• New Home Sales posted 13% short of expectations
• Initial Jobless Claims were higher than expected

Rates didn’t go as low as they could have.  Fed Chairman Ben Bernanke’s semi-annual statements to Congress eased concerns that the monetary policy would get too tight, too quick.  Stocks responded well at the end of the week as Bernanke confirmed that the Fed Funds Rate will stay low for an extended period of time and this took money out of the bond market.

This Week’s FHA Interest Rate Predictions

Friday’s Non-Farm Payrolls report, the “Jobs Report,” will likely be the big driver.  The expectation is that 30,000 jobs were lost in February.  A higher number will drive rates lower.  A lower number will drive the FHA loan rate higher.

We also have inflation data, notably the PCE, and the Fed’s Beige book on tap.

The FHA mortgage rates look great today, but this week has some highly influential reports that could cause dramatic swings by the week’s end.