What’s Ahead For Mortgage Rates This Week : July 2, 2012
Mortgage markets improved only slightly last week despite a large 2-day rally that lasted through Wednesday and Thursday.
Unfortunately for mortgage rate shoppers , markets were worse throughout the other 3 days of the week, which kept mortgage rates from dropping to new all-time lows.
As with many weeks since the start of the year, political and economic action within the Eurozone dictated the direction of domestic mortgage rates. Last week’s 2-day EU Summit was the major driver of markets.
In the days leading up to the summit, mortgage rates worsened as optimism in the summit’s outcome grew. This is because a stable Europe is good for the world’s economy which, in turn, encourages Wall Street investors to move money from “safe investments” such as U.S. mortgage bonds into more risky ones such as equities.
This creates an excess supply of mortgage bonds which causes mortgage rates to move higher.
On the day prior to the summit, though, optimism faded. Several Eurozone leaders expressed an unwillingness to compromise with each other and the rhetoric drove investors back into “safe” asset classes, which explains the mid-week drop in mortgage rates.
However, Friday, in a surprise move, EU officials announced a plan to recapitalize Europe’s banks, and to reduce borrowing costs for Spain and Italy. Once again, this puts investors in a risk-taking mood, and mortgage rates rose in response.
The news in Europe overshadowed strong housing reports here in the United States.
New Home Sales and the Pending Home Sales Index both gave strong results and inflationary pressures were shown to be in check. The housing market continues its slow, steady recovery.
This week, mortgage rates are expected to remain volatile. The markets have had the weekend to pick through the EU agreement and, later this week, the Bureau of Labor Statistics will release the June 2012 Non-Farm Payrolls report. In addition, this is a holiday week so trading volume is expected to be lighter-than-usual.
Mortgage markets will be closed Wednesday.
Mortgage markets improved last week, moving mortgage rates in pennsylavania back on a downward trajectory. Wall Street investors bid down mortgage bond yields on weaker-than-expected economic data from the U.S. and concern for events within the Eurozone.
Mortgage markets worsened slightly last week as demand for mortgage-backed bonds slacked. There was little surprise in U.S. economic data and the unfolding story lines of the Eurozone 
Mortgage bonds improved last week on lingering concerns for the European Union, plus weaker-than-expected economic data here at home. Global investors were net buyers of mortgage-backed securities last week, pushing mortgage rates lower nationwide.