Mortgage markets improved slightly last week, rebounding from the worst 1-week loss in recent history. The gains were geopolitical, however; the result of instability in the Middle East region. Economic data was overlooked as investors made a broad-based flight-to-quality.
For just the second time in 2011, conforming mortgage rates in Scottsdale fell on a week-to-week basis.
Rates shouldn’t have dropped, though. Here’s just a sampling of last week’s economic data, all of which can be tied to rising mortgage rates:
- Oil prices are soaring on supply concerns
- The Producer Price Index touched a 2-year high
- Philadelphia Fed Manufacturing Survey predicted strong Q1 growth
Furthermore, the just-released January FOMC Minutes showed an improving economic outlook from members of the Federal Reserve.
Therefore, home buyers and rate shoppers might consider last week’s rate drop a gift. Without the growing unrest in Libya, Egypt and Tunisia, mortgage rates would have moved considerably higher.
Instead, rates fell in a bout of what’s commonly known as “safe haven” buying.
In safe haven buying, global investors shun risk in favor of safer investments; usually in response to market uncertainty. Terror threats is one such event. Regime overthrow is another. Because the event’s long-term effect on markets is unknown, investors choose to move cash to safer asset classes until the future is more clear.
The extra demand for such assets drives prices up and, in the case of mortgage markets, drives rates down.
Last week, rates fell because safe haven buying was so strong. That may not be the case this week. As events play out across the globe, mortgage rates at home in AZ will be affected.
There’s a lot of economic data set for release this week, including a large series of housing-related figures. Stronger-than-expected data should cause mortgage rates to rise, safe haven buying notwithstanding.
If you’re still shopping for rates, or looking for a last chance to lock a low rate, now may be your best chance. Talk to your loan officer about a rate-locking strategy early in the week. As the situations abroad become more clear, mortgage rates should start to climb once again.
Our Team | Arizona Mortgage | Blarming | Will You Listen to Me | Arizona Short Sales | Arizona Foreclosures | Arizona FHA Loans | Arizona USDA Loans
| Arizona HUD Homes | Ariona VA Loans | Arizona Mortgage | AZ Short Sale Help | Power Ranch Bank Owned Homes | Find me on Google Earth | Arizona Mortgage Sitemap
AmeriFirst Financial, Inc., 1550 E. McKellips Road, Suite 117, Mesa, AZ 85203 (NMLS # 145368). 1-877-276-1974. Copyright 2014. All Rights Reserved. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates, and programs are subject to change without prior notice. All products are subject to credit and property approval. Not all products are available in all states or for all loan amounts. Other restrictions and limitations apply. License Information: Click Here for Licensing