FHA loan rates improved again last week.  That’s three weeks in a row.  That’s back to 2010 lows.  That’s back to the levels we saw in February and March right before they jumped.

We start this week with nearly all FHA borrowers looking at sub-5% rates, no points.

If you are seeing any of the following, click the chat button, we can help:

• 5% or higher rates
• Points
• Lender costs over $1,000

The FHA loan rate has been helped, significantly, by the mess in Greece and Europe.  Investors everywhere have pulled money out of the eurozone and plugged it into our markets.  More foreign money = lower home mortgage rates.

That’s good.  But that could end at any moment.  That’s risk #1.

Risk #2 to mortgage rates this week is the economic calendar.  It is loaded.

• Housing:  Home Builder Housing Market Index, Building Permits, Housing Starts
• Inflation:  PPI & CPI

Oh, and it is also the week of the release of the Fed minutes from the April meeting.  That’s always a market mover and happens in addition to some other highly influential reports.

FHA interest rates have been here before.  Never in history have they stayed here for long.  If you’re undecided whether to lock or float, you stand to gain very little by waiting, but could lose .5% in the blink of an eye.

Mortgage markets traded in a narrow channel last week.  There was very little data and wasn’t much volatility in general.

For rate shoppers, the momentum proved favorable for the second straight week.

There again isn’t much data this week.  The biggest report of the week will likely be the Producer Price Index set for Wednesday.

The Producer Price Index is essentially the business equivalent of the Consumer Price Index.  The logic is that inflation at the business level will eventually cycle to the consumer.  If there is one thing that guarantees higher mortgage rates, it’s inflation.

Should inflation come in hotter than expected, mortgage rates will rise the week.  Should inflation come in softer than expected, mortgage rates will improve this week.

Other influential data this week includes Housing Starts, Consumer Confidence and Initial Jobless Claims.