FHA Interest Rates
FHA loan rates took one on the chin again last week. That’s two in a row and last week was bad each trading session, although there weren’t many surprises.
Hot economic data, a holiday-shortened week, and the end of the $1.25T Federal Reserve purchase program all contributed.
The FHA interest rate hit its highest levels since late-December.
Jobs move economies. They also move mortgage rates. Last week, the economy saw some very positive news related to jobs and mortgage rates lost a bit:
- “Temporary Employment” — a leading jobs indicator — is up 313,000 in the last 6 months
- The average work-week and factory overtime both rose in March — a sign that hiring should increase soon
FHA Loan Rate Predictions – This Week
This could be another crazy week.
First, the Fed is in an emergency meeting today to review the Discount Rate policy. The market is on edge waiting for results.
Second, we’re in a really odd spot and technical trading patterns could take over mortgage rate direction for a few days and the influence on the FHA loan rate could be staggering.
Unlike fundamental trading in which markets move on data and projections, technical trading is how markets move based on patterns over time. The two methods co-exist on Wall Street but, occasionally, technical forces can be pronounced, leading markets to lurch up or down. This week may be one of those times.
Mortgage pricing is far below its 200-day moving average, resting slightly north of a key support level. If pricing worsens this week and bonds fall below the support level, mortgage rates could easily tack on quarter-percents or more per day until the market refinds its balance.
Overall, it’s a week you don’t want your rate to be floating. Sure, rates could improve, but there’s a lot more room for them to worsen.
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