Mortgage markets worsened last week on general profit-taking in the U.S. bond market, combined with talk of a coordinated rescue effort for Greece and its debt burden. Mortgage-backed bonds sold off, causing conventional and FHA mortgage rates to rise.
Mortgage markets improved last week on domestic jobs data and international banking concerns. The news triggered buying in the bond market and, as a result, conventional, FHA and VA mortgage rates improved for the 4th consecutive week.
In a news-heavy week, mortgage markets improved last week, adding to a 3-week rally. But, given last week’s data and domestic story lines, it’s surprising that rates actually fell.
Mortgage markets showed little conviction last week, carving out just a narrow trading channel. There was very little data on which for markets to move, leaving mortgage rates momentum-bound. Luckily for rate shoppers, mortgage rate momentum was favorable.
For the second straight week, the economic calendar is bare. Traders, once again, will be forced to rely on “gut” to make their trades.
Mortgage markets were relatively flat last week during holiday-shortened trading. After starting the week with a Monday surge higher, mortgage rates settled down thorough Tuesday and remained somewhat flat into the early-close for New Year’s Eve. However, as compared to the 4-month low posted post-Thanksgiving, conforming mortgage pricing has now worsened by more than 300 basis points.
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