Olathe Connect

Market Comment

Mortgage bond prices fell last week pushing interest rates higher. The durable goods report released Thursday was stronger than expected leading to the majority of the losses.
For the week, interest rates on government and conventional loans rose by about 3/8 of a discount point.

The Fed meeting Tuesday will be the most important event this week. Personal income, outlays, employment cost index, consumer confidence, ISM index, productivity, employment, and factory orders data will also be important.

Fundamental Week
Mortgage bonds traded in negative territory last week as traders prepared for an expected Fed rate hike this week. Fear and emotion dominated trading. The abundance of fundamental data this week provides a good opportunity for mortgages to recover from the beating they took last week. If the data this week reinforces the view that the economy is strengthening, mortgage bonds will continue to fall pushing mortgage interest rates higher. However, if the data comes in weaker than expected then a portion of the recent losses may be recouped.
Mortgage interest rates rose last week. Despite the negative movements, rates remain historically low. Now is a great time to avoid the uncertainty surrounding continued market volatility by locking your loan. Capitalizing on current levels protects against future volatility.